Forterra Trust (formerly: Treasury China Trust)

[Nick]

The distributions in its first year of listing was financed by the profit from the sale of an development asset pre-IPO.

Prior to the listing of the Trust, CREO sold its interest in Tangdao Bay development site and realized a profit of approximately $22.6 million from the sale in December 2009. CREO sold its interest in units of RREEF China Commercial Trust in the first quarter of 2010 and realized a profit of approximately $4.2 million from the disposal. Such profits form part of the Unitholders’ earnings to the Group and a portion of such earnings amounting to $8.3 million was utilized to pay the distribution for the financial period ended 31 December 2010. The balance of realized gain of $18.5 million is available for distribution for FY2011

Source: http://www.treasurychinatrust.com/Pics/C..._final.pdf

If they sell Central Plaza and BLP, it is likely that the profit generated will be used to fund the dividends in 2H 2012 and 2013.

The current operation is not sufficient to finance any dividend since the NPI yield is low and barely covers the finance payment and management fees. Perhaps once the development assets are completed and the old leases are reverted, we might see NPI yield increasing.

(Not Vested)

Thx! That explains the 'extra' Distributable Income for 1H11. For 1H12? OK, I understand Distributable Income is rather tiny at 0.4ct, but, no need to follow Trust Deed Covenants?

Prospectus:

TCT’s distributable income in relation to a distribution period (“Distributable Income”) comprises Net Income from Operations and Realised Gains.

The realized gains was carried forward and used to finance the dividend.

Thx! I understand the 1H11 part.
I'll go read the Prospectus when I'm free (before FY12 ends) to see if they have to pay for FY12 (I think they can don't pay at 1H12).

They have suspended dividends since 2H 11. Doubt they will declare any dividends unless the two properties are sold hmm.