WRF announces asset revaluation and $3m cap raising
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West Perth-based funds management group WRF Securities Ltd has announced a revaluation of its Southern River subdivision to $18 million from $12.5 million, as well as plans to raise $3 million to reduce borrowings.
The full text of a company announcement is pasted below
The Company is pleased to advise that a recently competed valuation has increased the value of the properties forming this syndicate from $12.5 million to $18 million. The indicated Internal Rate of Return for the existing investors has been recalculated showing a potential return of 30 per cent per year over the life of the syndicate.
The syndicate is in the process of acquiring a further property adjoining the existing properties for $3.4 million. Due diligence has been completed and additional funding has been arranged with the National Australia Bank. The settlement will take place on the 21 December 2006.
With the additional property the total subdivision will increase from 260 to 305 housing lots and one commercial lot. As a result of this additional purchase the manager has decided to raise a further $3 million of capital to reduce the borrowings from approximately 40 per cnet Lending Value Ratio to 25 per cent LVR. A supplementary Product Disclosure Statement is currently being prepared and will be available shortly.
The new finance structure will enable the syndicate to add adjoining properties should they become available. Additional land provides economies of scale for the syndicate which in turn will improve returns to our investors.
On the 28 November 2006, the Gosnells City Council approved rezoning of the land to development zoning which is a major step forward. The development is expected to commence in the latter part of 2007.
The Henley Brook Subdivision Syndicate is another subdivision syndicate with approximately 440 housing lots established in December 2005. The land is currently being revalued with the expectation of a significant increase over the initial valuation. Investors will be advised as soon as the revaluation has been received.
As part of diversifying our portfolio we are examining a number of opportunities in Victoria, Queensland and Western Australia as they become available.