takeover prospects, page-13

Peter

Yes it certainly isn't progressing as well as planned. I don't know how much you know, but if you do wish to know about the FMF look at the www.citypac.com.au website and click on FMF Fund Update for November, it gives a very sad story to the state of affairs the FMF is currently experiencing. (Cross reference that with some of the material regarding FMF in CIY's AGM presentation for a total 'picture')

Loan repayments are coming in at a dribble and it certainly doesn't look like enough will come in before February 28 2009 to extinguish the current CBA debt as well as meet Progress payments and of course City's Fees. Related party loans represent $261M, then we have second mortgage security on $9.3M as well as the 'effective' second mortgage status of priority payment to CBA and Fortress which represents $200M.

Oh sure on their $1.3Bn "purported" security assets at present it all looks reasonably ok still. And as long as assets get sold and loans get repaid City Pac will continue to get their fees at the expense of unit holders.

So when Feb 28, 2009 comes around, lets pretend the Bank WILL extend their loan for a 5th time (after all City is consistently reducing the balance and the banks in a great position to keep collecting the interest payments - no risk for them) - unit holders will for another period of time be told that they can't be paid distributions or redemptions until such time that the bank loan is paid off.

Meanwhile all these assets are being sold to basically keep CIY alive (i use that term loosely lets face it - they are on life support with a DNR notice as far as i'm concerned) - which means that when push FINALLY comes to shove and unitholders get to recover monies it will most likely be at a substantial discount to original investment.

Under corporations law it states that where there is a conflict between the manager and unit holders interests that the unit holders must receive priority. To me at least, it certainly looks like the manager is giving themselves priority.

To my mind they always blame someone else for their woes - "oh it's all a result of the credit crisis", "oh we can't pay distributions to you because the BANK wont ALLOW us", "oh {insert excuse here}.

Anyway that's my views on the FMF, it would be interesting to get someone elses opinion on this matter if you're interested in looking into it further. Let me know where you think i'm on target and where you think i'm off in fairy land LOL!!

Thanks

Nic (holdings in FMF and CIY shares)

P.s. Do you think CIY will be here in 12 months? I don't.