This article is from the Australian Property Journal archive
FUNDS manager Balmain Trilogy has negotiated with the Commonwealth Bank to extend the expiry of an $82 million loan owed by the Pacific First Mortgage Fund.
The new facility will now expire on June 30 2010.
Balmain Trilogy joint CEO Andrew Griffin said that the CBA’s decision to extend the loan on renewed terms provided the fund with greater ability to improve recoveries from its assets.
In November last year, Balmain Trilogy revealed that the fund had written off half of its assets through bad loans to City Pacific related companies.
The review reveals gross assets write down of $448.9 million for the 12 months to June 30 2009. This write down represents an additional impairment of $108.9 million from the written down value as at December 2008 which was $630.0 million. The fund which previously had over $1 billion in gross assets now stands at $521.1 million.
“As a lender to the fund CBA is entitled to act immediately to recover its loan funds. Had they done this a fire sale of some fund assets would have been forced.
“Their decision to extend the loan removes this damaging consequence and enables us to better protect the asset values,” Griffin said.
“This is a significant win for the unitholders of the fund. We are comfortable that the fund can comply with the new terms of the facility,” Griffin concluded.
Joint CEO Rodger Bacon said the extension will give unitholders some certainty concerning the future of the fund.
Australian Property Journal
