institutional raising, page-7

Maybe it all just goes to show how hard it is to read CIY's financials. I won't promise I have everything 100% accurate however:

1. Financials definitely NOT audited. You need to get to the very last page of the 29/02/08 release to find KPMG say "Based on our review, which is not an audit ... "
2. Yes it was, but doesn't change the impression I get that it was due to the bank getting cold feet, which is related to point 3
3. I disagree and believe the debt is drawn to the $248.3 million. Why get an additional $50 mill SHORT TERM facility approved if a $190 million facility is not being used? CIY only commments on the useage of the short term facility, so my belief is the long term is fully utilised. Also, the staggered reduction in the larger facility would NOT be required if it was not being used. The key here is that the short term facility was in default at least twice
4. Yes, but the key question is will the obligation to repay the debt restrict their ability to fund other projects? Maybe even some they have commited to.
5. True.
6. True. However (a) CIY gets good fees from this fund, and (b) they would get likely much more income from fees levied to the borrowers / developers who use the funds provided by this fund. So the position of this fund would have a material impact on both CIY's income (not to mention its reputation)
7. You appear to be right there. FUM for the mortgage fund have gone from $1,057 million to $963 million. So not catastrophic. It does raise the question though as to why they have been drawing so heavily on debt - unless they commited to projects expecting inflows of funds to continue and were caught in a squeeze.

I'm NOT saying the company will go belly up but from what I've read it is difficult to get an understanding of how the mortgage fund's current position will impact the business of CIY over at least the next 6 months or so.

MJS