MI-Reit’s auditors raise going-concern flag
MACARTHURCOOK Industrial Reit’s (MI-Reit) independent auditors have flagged the trust’s going-concern status in an emphasis of matter released yesterday.
‘At March 31, 2009, the group and the trust have interest-bearing borrowings of $224.4 million and $201.3 million, respectively, which are due for repayment within the next 12 months as well as an existing capital commitment of $91 million.
‘The refinancing of the borrowings and financing of the capital commitment have not been completed at the date of this report. These conditions indicate the existence of a material uncertainty that may cast significant doubt on the trust and its subsidiaries’ ability to continue as a going concern,’ KPMG LLP’s emphasis of matter, dated June 19, stated.
In response, MI-Reit’s manager, MacarthurCook Investment Managers (Asia), said yesterday: ‘The manager, together with its adviser, Standard Chartered Bank Limited, is working to effect the refinancing of the borrowings and to fund the capital commitment to acquire the property, and will make further announcements at the appropriate time.’
Last month, MI-Reit gained approval from its lenders, National Australia Bank and Commonwealth Bank of Australia, to extend to Dec 31, 2009, its $202.3 million loan facility – that had been reduced from $220.8 million – as it continues negotiation for longer-term refinancing.
Under the terms of the extension, failure by MI-Reit to settle the acquisition of the $91 million property at the International Business Park would be considered an event of default.
According to MI-Reit’s financial statement for the year ended March 31, 2009, the property was under construction and was due to be completed by the fourth quarter of this year.
‘Change in market conditions has meant that the fair value of the property is lower than the contracted amount. Consequently, a provision for onerous contract of $20 million has been recognised in the statements of total return,’ MI-Reit had said in the financial statements.
MI-Reit’s share price closed one cent higher at 33.5 cents in trading yesterday.
Source : Business Times – 20 Jun 2009
‘At March 31, 2009, the group and the trust have interest-bearing borrowings of $224.4 million and $201.3 million, respectively, which are due for repayment within the next 12 months as well as an existing capital commitment of $91 million.
‘The refinancing of the borrowings and financing of the capital commitment have not been completed at the date of this report. These conditions indicate the existence of a material uncertainty that may cast significant doubt on the trust and its subsidiaries’ ability to continue as a going concern,’ KPMG LLP’s emphasis of matter, dated June 19, stated.
In response, MI-Reit’s manager, MacarthurCook Investment Managers (Asia), said yesterday: ‘The manager, together with its adviser, Standard Chartered Bank Limited, is working to effect the refinancing of the borrowings and to fund the capital commitment to acquire the property, and will make further announcements at the appropriate time.’
Last month, MI-Reit gained approval from its lenders, National Australia Bank and Commonwealth Bank of Australia, to extend to Dec 31, 2009, its $202.3 million loan facility – that had been reduced from $220.8 million – as it continues negotiation for longer-term refinancing.
Under the terms of the extension, failure by MI-Reit to settle the acquisition of the $91 million property at the International Business Park would be considered an event of default.
According to MI-Reit’s financial statement for the year ended March 31, 2009, the property was under construction and was due to be completed by the fourth quarter of this year.
‘Change in market conditions has meant that the fair value of the property is lower than the contracted amount. Consequently, a provision for onerous contract of $20 million has been recognised in the statements of total return,’ MI-Reit had said in the financial statements.
MI-Reit’s share price closed one cent higher at 33.5 cents in trading yesterday.
Source : Business Times – 20 Jun 2009
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