Development financier City Pacific is hatching a plan to swap its investors out of their $1 billion in frozen mortgage fund units and into ordinary shares in its main property development company, the
Sydney Morning Herald reported.
City Pacific did not confirm the plan. Chief Executive Phil Sullivan told the newspaper: "We are looking at a number of proposals. We are waiting on independent experts for their reports."
Investors in the City Pacific First Mortgage Fund, which has around $900 million under management, had their distributions frozen three months ago.
The fund is under pressure to repay loans due to Commonwealth Bank. The fund has also taken on US hedge fund Fortress as a co-investor.