Ann: Funding Agreement , page-7

I know SPV will sell properties been build and just keep those commercial properties as rental income. But risks are:

1) Can they sell those residential properties and have enough cash to develop commercial properties?

If they cannot sell residential properties, then they don't have cash to develop commercial properties and FWL will not get income stream from commercial properties.

I assume after sold residential properties, they will need to repay their own debt first.

How fast can they sell those residential properties? I know in China some developers sell <5% of built properties in 10 years. Price is often controlled by Chinese government, because government fears property price collapse. It is NOT free market like Australia.

2) Can they lease out commercial properties???

You have to ask yourself why TFA will sell 21.8% SPV to FWL. Those properties are in China and FWL will have income in China (ie FWL is a foreign company in China and has income) will be subject to Chinese tax system. Then you transfer Chinese yuen into Australian dollar (may be subject to Australian tax again)... it becomes very complicated.

Why don't TFA keeps 100% of SPV and use 21.8% of rental income (from commercial buildings) to subscribe new shares??? So local Chinese company (TFA) pays only Chinese tax.