fee cut offer put to centro owners...

Source: www.theaustralian.news.com.au

Fee-cut offer put to Centro owners
Maurice Dunlevy | February 27, 2008

BOUTIQUE fund manager Pelorus Property Group has proposed an across-the-board 10 per cent fee cut to sweeten its planned takeover of Centro Properties Group syndicates that manage $1 billion of retail roperty.

Centro MCS 16 syndicate investors will vote on Pelorus's fee-cut proposal at an extraordinary meeting that has been scheduled for March 31.

The special resolution to reduce management fees involves four changes to fee structures.

The Sydney meeting has ostensibly been called to sack Centro as the responsible entity for the fund in favour of the Pelorus Property Group, paving the way for Pelorus to wrest control of another nine syndicates from the besieged Centro group. The notice of meeting came last night along with a Pelorus response to an earlier attempt by Centro to discourage investors from calling a meeting to replace Centro MCS Management Ltd as manager of a number of Centro syndicates.

In its own letter to Centro MCS 16 investors, Pelorus said there had been concerns about Centro's fees and charges, and the adequacy of disclosures and the extension of syndicate terms, since the former MCS business was sold to Centro in 2003.

"As a consequence of the financing difficulties disclosed by Centro on December 17, 2007, and subsequent disclosures of banking and interest rate hedging problems within Centro MCS syndicates, we believe it is in the best interests of investors to separate the management of MCS 16 from Centro and its issues," it said.

Jointly signed by Pelorus executive chairman Seph Glew and managing director Stuart Brown, the letter said that despite past Centro assurances that its share market meltdown would not necessarily affect the syndicate, distributions had been suspended until further notice.

Centro had also warned that it may not be able to honour its hedging obligations to syndicates.



Ends.

Cheers, Pie :-)