Lender Support Bolsters Redcape Profits

By Andrew Starke

The listed Redcape Property Fund has reported a total net profit of $34.6 million for the six months to December 31 and announced a deal with lenders that will see its debt facility extended.

The fund, which was formerly known as Hedley Leisure and Gaming Property Fund, sold eleven properties over this period which allowed it to reduce its debt by $92 million.

However it still owes a syndicate of banks approximately $650 million.

The group owns (but does not operate) 87 pub freeholds and 13 other properties.

Redcape Propery Fund chairman, Colin Henson, said the decision to extend the fund’s debt facility to October 31, 2012 was pleasing.

“The terms of the loan extension … include higher interest rates margins, a restriction on distributions and a requirement for Redcape to significantly reduce its loan and interest rate swap balances over the term of the loan extension,” he said in a statement to the Australian Stock Exchange.

“It is nevertheless pleasing to consider that Redcape has the opportunity over the period to October 2012 to transform itself into a lower-risk, more streamlined, profitable operation.”

Redcape shares were trading at 30 cents at midday today (Feb 26), up from 25 cents seven days ago.