been to the preso

Hi all,

been to the brisbane preso, had a good chat with our ceo, Luke, and also kylie.

They are puting the bandaids where they need to be.

The paramount issue is to place us in a negotiable position with regard to debt re-fiancing, and extending terms,

There is a sizbale facility that we are working on atm june30 09 maturity. 140m i think.

ie now.

When you negotiate with a lender to extend terms, you need to put something on the table.

In this case, it is an asset sale, so that you actually are trying to re-finance a smaller amount.

That is what the lenders want to see, that your revenues, and managemnt and asset sale, can reduce the loan to refinance it.

So you say, here we've paid 30m off this loan, now how about we negotiate the terms for its extension.

Our priority is to avail ourselves suitable terms to the extension of the facilities that are maturing.

The current asset sales, are to provide us the cash to do so.

the 91m last sale, there was 20 million extra above the amount required to pay off their portion of their mortgages.

This 20m is being utilised to reduce our head coventant (unsecured facility) with 65% lvr test, from 50m, to 30m.

So if our portfolio, goes into lvr greater than 65%, its only about 30m we have to sort to cover it. In fact, there was a sniff, that we are likely to go to 70% lvr on our portfolio, due to assets reducing in value. So infact, this covenant is likely to be breached, But, it is not secured by any property, so that lender has to play nice.

We will then negotiate, new terms, apon us paying off 20m, that they might raise the LVR to a higher or remove it, as the facility is only now on 30m.

Then, there is only one remaining facility with a covenant on it.

I think he said it was 261m, and it is secured by 10 assets and including only one core assset. Also LVR 65%. test.

What the strategic review came to, is really centred apon the sale of non core assets, that provide the cash to reduce facilities that are needed to be extended.

It is not so much concerned with the LVR breaches, that appears secondary, and will be negotiated to alternate terms. ie, we might pay a slightly higher interest rate in lou of a more flexible LVR test.

Keep in mind also, that there is only 1 convenant really,above that, and it is limited to the properties it is secured by.

In ultimate terms, there is no domino effect. And absolute failure to renegotiate this facility, can not lead to any of the remainder of the portfolio being jepardised.

Since the only other covnenated debt facility, is the 50m nonsecured, on the lot, so what if the failure of the first covenant drags the rest o/a to >65%.

The CEO is really switched on.

It is clear, that there will be no raising, and they are looking to the interests of holders. re no dillution.

They fundementally understand how to save the patient on battlefield dressings.

You first save the cow from the abertuars, before trying to milk them for dividends.

Also, asset sales are NON core. Non earners. They retain the earners, as i suspected.

Apparently, the sale of a leased, earning piece of realestate, will be sold for the same as a vacant space, so, naturally, sell the non core!!!

The patient will live.

That is why we have rebounded today.

More details to be announced in August, about the curent positions of covenant, lvr, financials.

Luke is a very bright yound man, and switched on, to moving the right chess peices first, to get us to other other side of the board safely.

That said, they maintained it is a difficult environment.

Large facililities arent growing on trees, so extending terms is the most favourable direction.

In fact, a comment in general, said that facilities under 40m were beginning to flow again, but difficult for larger sums.

Phewwww!!

The free lunch was good, but the $30 parking i could live with out.

7 bucks a sandwich, and i got a free pen

cheers