Port Bouvard extends settlement date on The Cut

Mandurah property developer Port Bouvard has once again extended the settlement date for the planned $6.3 million sale of The Cut golf course and clubhouse to Vive Holdings Ltd and John Kelly.

Port Bouvard had planned to sell a range of assets to Vive but the sale of its golf course, clubhouse, villa site, hotel site and marina have been terminated and the non-refundable deposit of $4.5M retained as income.

It negotiated a new contract for sale of the The Cut gold course and clubhouse but has now deferred settlement to 28 April from 12 April following a delay in settlement documents.

The developer announced that any further delays would attract interest of 15 per cent pa until the end of May after which the sales contract comes to an end if not settled.

The company also announced it was in the process of preparing a bankable feasibility study regarding development options for villa site, hotel site and waterfront high rise apartment site.

At market close, shares in Port Bouvard were at $2.10.

Below is the full announcement:

FUTURE DEVELOPMENTS

As previously advised, the contracts for the sale of the golf course, clubhouse, villa site, hotel site and marina have been terminated and the non-refundable deposit of $4.5M retained as income and included in the company's interim accounts.

The company has negotiated a new contract with Vive Holdings Limited and John Kelly for $6.3M for the purchase of the golf course and clubhouse only.

At the time of negotiating the contract it was hoped that settlement would take place on 12th April 2006, however Vive Holdings Limited and Mr Kelly have not been able to have the documents ready for settlement in time. Consequently the Company has agreed to extend settlement to 28 April 2006 when the documentation should be in place. Any further delay after 28 April 2006 will attract interest of 15% per annum until the end of May 2006 whereafter the sale comes to an end if not settled.

The Company has agreed to carry $3.3M secured by 2nd mortgage for two years at 8% interest payable six monthly in advance with the principal repayments of $1.5M and $1.8M in 12 and 24 months after the settlement date.

Late last year the company received approval from the City of Mandurah for a Development Guide Plan (DGP) over the resort site incorporating the villa site, hotel site and waterfront high rise apartment site. The high rise apartment site is expected to yield 48 luxury apartments.

The Company is in the process of preparing a bankable feasibility prior to determining which way the company will proceed with these assets in the most profitable way taking risks into consideration. Our initial view is that these assets have appreciated in value and are in keeping with the strong ongoing demand for premium residential property in the Peel Region. We expect to have the feasibilities completed around June/July this year at which time the company will make a further announcement relating to its decision.

The Company has decided to keep the marina for the time being which is showing steady growth and we believe this will continue for many years as more people move into the adjacent areas.

The Company will also seek further opportunities in which to apply its intellectual and property skills.

In keeping with the company's policy on the payment of dividends each June and December and to be able to pay the next dividend fully franked the Directors have deferred the June 2006 dividend to be paid on 3rd July 2006.