pref shares for fmf holders...

Looks like CIY won't be issuing regular shares to FMF holders after all, (which would have diluted existing CIy shareholders) they're now looking at a pref share offer.

***********************************************************

ASX Release 30 July 2008
City Pacific Limited (ASX: CIY)
Interim dividend payment update
City Pacific, upon consideration of its funding requirements and objective to reduce its
corporate banking facility, has resolved to amalgamate the Interim dividend instalment
payment dates into one final instalment payment date being 28 November 2008.
This decision will allow City Pacific to apply all available funds received through the usual
operations of the company to reduce the corporate facility and to meet on going operational
expenses.
On the final instalment payment date of 28 November 2008 City Pacific will pay 12 cents per
share to those shareholders who elected to receive the cash payment for the interim
dividend.
Co-investment arrangement with Teak Capital Partners and a foreign institutional
investor
City Pacific as responsible entity for the First Mortgage Fund (“FMF”) has executed an
indicative term sheet with Teak Capital Partners and a foreign institutional investor
(Investors). The Investors will co-invest approximately $44 million in the Grande Pacific
Broadwater project which is currently fully funded by the FMF.
The FMF benefits from the arrangement with the Investors as follows:
1. repayment of $30 million back to the FMF on or before 29 August 2008; and
2. the Investors assume the $14 million construction funding obligation for the project.
The agreement is subject to execution of satisfactory documentation and the completion of
due diligence by the Investors with settlement expected on or before 29 August 2008. City
Pacific is confident that the Investors will be satisfied with their due diligence and that the
matter will proceed to completion as scheduled.
City Pacific as responsible entity of the FMF continues to build value by introducing and
developing long-term relationships with institutional investors.
Proposal to First Mortgage Fund Members
Due to the requirement by City Pacific as responsible entity of the FMF to preserve the value
of the FMF’s assets City Pacific instituted a deferment of redemptions in early March 2008.
City Pacific recognizes that certain members of the FMF require liquidity and is working with
its advisors on potential liquidity solutions for those FMF members.
2
The structure of any proposed solution is expected to include an offer of preference
securities in City Pacific. The offer will be accompanied by an independent expert report
which will advise members of the FMF on whether the offer is fair and reasonable. FMF
members will have the option to have their investment redeemed by the FMF in exchange
for the preference securities.
The preference securities being offered will have certain characteristics representative of the
units in the FMF, one exception being that they are intended to be tradable on the Australian
Securities Exchange (subject to the required approvals) and therefore shall provide a degree
of liquidity for the holder.
In order for the independent expert to complete their report and provide their advice to the
FMF members they require the 30 June 2008 audited accounts. City Pacific anticipates the
audited accounts will be finalised in late August 2008.
CITY PACIFIC LIMITED
Phil Sullivan
Managing Director & CEO