Capital Return & Investor Update

  • 10-22-2015

Dear Investor

The Board of Directors has determined to make a further capital return of 25% of all account balances for the November quarter. This payment will be made on Thursday 26 November, 2015. Cleared funds will be in your nominated bank account the next day. If you wish to change your bank account details, we kindly ask that you forward your written request to do so before 25 November, 2015.

When the Board of Directors of Mayne Imvestments Limited made the difficult decision in June 2012 to wind the Fund down, it gave a commitment to preserve as much investor capital as possible by avoiding costly 'fire sales'. Given that our loan portfolio contained a number of unfinished land and property developments, we always knew the process would take some time to achieve.

It is pleasing to report that at long last there appears to be light at the end of the tunnel. Most of these developments are now nearing their end, with sales being achieved at significantly higher prices than what would have been achieved had they been rushed to the market, undeveloped or 'as is'.

The real estate market, particularly on the North Coast of NSW, although still price sensitive continues to improve. Land sales in particular, after years of sluggish sales, have shown a noticeable pick up, allowing three land developments to be completed in the past twelve months, albeit some yaers later than intended.

Significant progress has been made in selling assets where the Fund has taken over the management of properties as 'mortgagee in possession' after the borrower has defaulted in its commitment under the loan agreement. The final stages of the last remaining local land development, after a number of unexpected delays, has been given development approval and will be put to market in the coming weeks.

A large Ballina riverside development, over which a receiver had been appointed some fifty eight months ago, is now fully sold.

The proceeds from the sale of these properties are returned to investors as part of the quarterly capital returns.

Another large borrower, having attempted to refinance its loan over many months, decided to appoint an administrator to their company on 4 June, 2015, when the refinance could not be achieved. The Fund in turn immediately appointed a Receiver over the development property held as security for the loan. There is some interest in this property and it is hoped it will be quickly sold once it is properly marketed.

The small number of remaining loans are due to expire within the coming months and it is expected that all loans, other than loans where recovery action is currently being undertaken, will be repaid within the current financial year. The Board will continue to take legal action to pursue outstanding debts (from other than the sale of security property), where it is considered commercial to do so.

Since May 2011, when the policy of partial redemption offers was replaced by compulsory returns of capital, there have been 18 quarterly payments, which together with hardship payments, have totalled $166,991,116. Funds under management will fall to $22,513,012 once the November payment is made; down from a pre GFC high of approx. $330 million.

It is our intention to continue to make capital returns on a quartely basis, although the extent of these returns of capital will be determined by the available liquidity at that time.

Throughout this period, the unit value, although fluctuating from quarter to quarter, has consistently hovered at or just below the $1 mark. At the time of writing, the unaudited value of the remaining units in the Fund was $0.9732.

The Board will continue to work towards the successful repatriation of the remaining funds as quickly as possible. Investors can be assured that the Directors' main priority is the protection of your investment and achieving the best possible result in the wind down process. Exactly how long this will take cannot be stated with any certainty although the Board firmly believes that this task is drawing to an end.

We thank all investors for their continued patience and understanding an what has been a difficult and protracted process.

Greg Andersen                                                                                                                                        CEO

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