This article is from the Australian Property Journal archive
GEO Property Group is carving its own path, yesterday breaking away from the management of Octaviar Limited, formerly known as MFS Limited.
In addition, GEO, formerly MFS Diversified Group, is expected to resume trading after entering into a trading halt on February 29 when it breached one of its debt covenants with its lenders, a syndicate led by the Bank of Scotland.
GEO’s managing director Guy Farrands said the group has exchanged binding agreements to acquire all of the shares in the responsible entity of the GEO Property Trust, as part of its transition to internal management.
The responsible entity is to be acquired from Octaviar Financial Services Limited for $2.5 million and will be paid for from existing debt facilities. Meanwhile, 4,329,472 GEO stapled securities held by Farrands under his previous employee incentive arrangements will transfer back to a subsidiary of Octaviar Limited.
The group will also, as part of internalisation, take back full ownership of a Communities Development project that was acquired by Octaviar Land Fund and that was to be developed under a development management arrangement with GEO.
GEO intends to offer this project for sale.
Farrands said the internalisation of the management of the trust and the acquisition of the Communities Development project formalised the group’s complete separation from Octaviar.
The group has also accepted the resignation of Craig White as a non-executive director. White was the former chief executive Officer off Octaviar and former managing director of the group and has been a director since August 2005.
Meanwhile, GEO has further progressed its capital realisation program, having finalised the sale of a further $28 million worth of real estate, taking the total sales finalised to approximately $68 million.
Negotiations are advanced on the sale of a further $100 million of investment real estate and communities development projects, bringing the total sales to $168 million, representing 70% of the total realisation target.
And GEO has agreed terms for two joint ventures on existing communities development projects with a total value of approximately $25 million (100% interest). The joint ventures comprise a portion of GEO’s Mt Cotton project for $14.0 million (the land only component with GEO retaining the house and land and commercial part of the project) and the entire Cornells Hill project for $10.6 million.
If completed, the two transactions will be deliver $18.7 million to GEO, which will be applied to reducing the group’s multi option debt facility.
Farrand said the group remains confident of achieving operating EPS of 8.1 cents per security for FY08, before one off non recurring items, including cost relating to Octaviar internalisation; costs relating to re-negotiation of debt facilities; write downs / losses on sale of investment property; and loss on sale of securities in both Hedley Leisure and Gaming Property Fund and National Leisure and Gaming Limited of $8.0 million.
Australian Property Journal
