Wellington Capital PIF/Octaviar (MFS) PIF

[Juan Mortyme]

Re: Octaviar MFS Premium Income Fund PIF

CableGuy wrote: "QUT picket line outside the WC office today. WC provided complimentary bottled water to the chanting students."


Students. Off course. Who else would you use for a rent-a-crowd ?

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

QUT picket line outside the WC office today. WC provided complimentary bottled water to the chanting students.

Well my complaint to ASIC today seems rather tame in comparison!!!

 

[Juan Mortyme]

Re: Octaviar MFS Premium Income Fund PIF

Receivers as well as VA.

-------article start---------
Octaviar creditor sends in receiver

by Colin Kruger
September 16, 2008

THE vultures are swooping on the Gold Coast property developer Octaviar, with the appointment of receivers yesterday by one of its major creditors, Fortress Credit Corp.

Octaviar still owes Fortress about $60 million, which is secured against the assets of the main company in the group.

PBB's Stephen Parbery said he and Tony Sims were appointed to protect Fortress's interests in Octaviar - previously known as MFS - following the appointment of voluntary administrators by Octaviar's board over the weekend.

The board was attempting to keep alive the prospect of a deal with creditors via a deed of company arrangement so as to avoid collapse.

Mr Parbery indicated the appointment of PPB did not necessarily signal Octaviar's demise.

"We are not working at odds with the administrators, we are working with them," he said.

Octaviar's main asset is a 35 per cent stake in the tourism group Stella. It also operates the observatory deck on the Gold Coast's tallest building, Q1, and owns the Queensland child-care group Sunkids and a shopping centre on the Gold Coast.

Octaviar's offer to pay noteholders 22.5c in the dollar has already been accepted by two of its four main creditors, New Zealand OPI Pacific Finance and the former MFS Premium Income Fund (PIF).

The Public Trustee of Queensland, which attempted to have Octaviar wound up last week, represents noteholders with $349 million in convertible notes that were originally due to expire in 2011. Investors in the convertible notes are due to meet on September 30 to consider Octaviar's offer.

The Australian Securities and Investments Commission (ASIC) has begun legal action to delay a meeting of unit holders in the old MFS Premium Income Fund that is scheduled for Thursday. The meeting is to call for a vote of unit holders that could cement Wellington Investments' managerial control of the fund.

ASIC said "unit holders require additional information in order to make informed decisions".

The regulator's view echoes that of a unit holder group, the PIF Initiative, which is recommending investors reject the proposed changes and seek alternatives.

The Hicksons partner Kalinda Cobby, who is representing the group, expressed concern that the PIF noteholders were being railroaded into accepting proposals with implications that are not fully understood.

--------end---------

direct link: http://business.smh.com.au/business/octaviar-creditor-sends-in-receiver-20080915-4h1r.html

 

[Juan Mortyme]

Re: Octaviar MFS Premium Income Fund PIF

This is funny.

----------------

R.I.P Octaviar (OCV) not trading

by Tim Boreham | September 15, 2008

IT is with profound sorrow that Criterion records the passing of Octaviar (nee MFS) over the weekend.

On behalf of the family of grieving creditors, the insolvency team at Deloitte announced it had pulled the plug.

Technically, the patient is in voluntary administration (not liquidation) and therefore still on life support. The company still hopes to work with the administrators to “achieve an accommodation with all creditors to produce a better outcome for stakeholders than liquidation”.

But with liabilities of $1 billion, the group has as much signs of life as a cadaver-storage unit at the morgue.

Octaviar will be remembered for many being many things, other than as one of the first true victims of the invidious credit-crunch disease.

Associates of Octaviar will prefer to remember this once sprightly beast's relentless expansion into areas of commercial endeavour - including property, ski fields, travel agents and funds management - and as a generous facilitator of youthful indulgence as provider of “schoolies”' accommodation.

While once readily indulged by investors, Octaviar will also be remembered as a complex individual, given its spread of activities and labyrinthine funding arrangements.

As a Gold Coast based entity, Octaviar was routinely maligned as a member of the “white-shoe brigade”', an unfair slight indeed as even the most fashion-challenged Queensland moguls would not be seen dead in such loafers these days (crocodile skins are still de rigeur).

And Octaviar was never accused of bribing elected officials, or bulldozing mangrove swamps.

Your columnist recalls admitting to a broker that he didn't really understand the company and suspected that no one else did, either. “Don't you worry about that, they know what they're doing,” he replied, a response which does justice to that great white-shoe patron, Sir Joh.

However, Octaviar did display the occasional dark side, none so much as the company it kept with fellow delinquent and joint venture partner Babcock & Brown.

Mourners will prefer to remember the old Octaviar, not the comatose entity that last traded at 99 cents on January 22 (aptly, Black Thursday).

Even then, most brokers retained a buy on the stock and Criterion was convinced enough about the value of its 35 per cent stake in the Stella travel business to ascribe a speculative buy.

Funeral arrangements have been deferred pending a full post-mortem on the remaining assets. A name won't be enough to facilitate a Lazarus-like recovery.

Stella, which is up for sale, remains a valuable asset - no one's quite sure how much - but it won't be enough to placate all the black-suited creditors - notably 550 noteholders and the taxman - lined up for the viewing.

No flowers by request - but a fat cheque or two would come in handy.

borehamt AT theaustralian.com.au

The Australian accepts no responsibility for stock recommendations. The author does not hold an interest in any of the stocks mentioned. Readers should contact a licensed financial adviser.

------------------

 

[Juan Mortyme]

Re: Octaviar MFS Premium Income Fund PIF

----------------
Clinging to hope

by Ben Butler
September 16, 2008 12:00am

INVESTORS in the $750 million Premium Income Fund must wait until at least tomorrow to learn the fate of their holdings.
Premium Income Fund was formerly controlled by failed investment company Octaviar.
Uncertainty over the fate of the fund comes as vulture fund Fortress swooped on Octaviar, the former MFS.
Fortress has appointed receivers Stephen Parbery and Anthony Sims of PPB to safeguard a $60 million exposure to Octaviar, which went into administration on Saturday.
Wellington Investment Management, which bought the fund at a knock-down price in May, has vowed to fight an Australian Securities and Investments Commission move to stop it changing the fund's constitution at a meeting of unitholders scheduled for Thursday.
Last Thursday, ASIC asked the Supreme Court in Queensland for an injunction stopping the meeting because of concerns over disclosure.
An ASIC spokeswoman declined to comment on the PIF.
Wellington's proposal for a new constitution has come under fire from investors because it imposes an onerous fee of more than $8 million if the company is sacked as fund manager.
It is believed ASIC's concerns are limited to disclosure and the watchdog does not want to take a position on whether or not the new constitution is fair to investors.
If Wellington's push for a new constitution failed, the PIF might face wind-up, where its assets would be sold and returned to unitholders.
Wellington chief executive Jenny Hutson is a long-time associate of Octaviar boss Chris Scott, having served on the board of Mr Scott's tourism company S8.
Octaviar, then known as MFS, bought S8 for $700 million in 2006.
Mr Scott was formerly a shareholder in Wellington.
Ms Hutson said Wellington stood by the "clear concise and detailed information" it had provided to unitholders and would fight the "extraordinary" court case.
"I think it's ill-founded. They've listened to the voice of a very small number of investors.
"It has come at a very late stage."
She said more than 57 per cent of unitholders had already voted, and an overwhelming majority favoured Wellington's new constition.
Octaviar had been on the brink of collapse since January.
It was suspended from the stock exchange after its stock price plunged when then-chief executive Michael King launched a $550 million share issue.
Administrators John Grieg and and Nicholas Harwood estimate it owes creditors about $1 billion.
------------

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

ASIC's actions upset investors:::::Nick Nichols

September 16th, 2008

A SPLIT in the ranks of Premium Income Fund investors spilled on to the streets of Brisbane yesterday.
About a dozen protesters stationed outside Wellington Capital's Queens Street office were howling down plans by the corporate watchdog to pull the pin on a planned meeting on the Gold Coast this Thursday to vote on the fund's survival.
The Australian Securities and Investments Commission has responded to concerns by some investors that Wellington Capital, headed by Jenny Hutson, was not acting in the best interests of unit-holders, many of them elderly, who poured $770 million into the fund when it was under the control of MFS.
However, yesterday, other investors said to be the majority were angry that ASIC was meddling with the rescue plan proposed by Wellington, accusing the watchdog of failing to act on behalf of investors when it was under the control of MFS.
Placards waved by protesters yesterday denounced PIF's former management team, which included MFS founders Michael King.
It was unclear how many of yesterday's protesters were PIF investors, but spokesman Philip Higson said many of his friends were investors and he was willing to support them, calling for this Thursday's meeting to proceed as planned.
``If they go down, there's going to be a lot of mum and dads go down,'' he said.
Yesterday's protest was directly opposed to the views of a splinter group of investors, known as the PIF Initiative, who want Wellington Capital removed as responsible entity for the fund and plans to list on the National Stock Exchange abandoned.
Wellington has proposed a listing to allow cash-strapped investors to sell their units in an open market, but PIF Initiative has argued the price would be at a sharp discount to the fund's value.
Ms Hutson, Wellington's executive director, has said the fund, which has a $55 million exposure to the Raptis Group, was valued at 45c in the dollar as a going concern.
Liquidation would only deliver unit-holders 14c in the dollar, she said.
This Thursday's meeting, which will draw investors from as far as Japan, has been called to vote on whether the fund should continue as a going concern and whether Wellington Capital can proceed with its plan to recover all investor funds over the next three to five years.
``What's disappointing from our perspective is that ASIC has left this really late,'' said Ms Hutson.
She said Wellington had provided ASIC with all materials requested at the end of a series of investor forums in July and it had been `well considered' by investors since then.
``Here we are at the end of the 28 days with ASIC coming out of nowhere and challenging it,'' she said.
ASIC last week lodged a Supreme Court action, to be heard tomorrow, restraining Wellington from calling the meeting.
``The only people that are going to be hurt by this are the invest-ors themselves,'' said Ms Hutson.
She said Wellington was outlaying $120,000 to hold the meeting, which could potentially draw thousands of investors to the Gold Coast Convention Centre.
Ms Hutson said Wellington's planned resumption of distributions to investors, who have been told they will receive a total of 3c a unit by Christmas, was also in jeopardy following ASIC's actions.
ASIC yesterday declined to comment on the matter.
One Sydney investor, who would only identify himself as Javier, yesterday slammed ASIC's actions and backed Wellington's plans for the fund.
``ASIC has intervened to the detriment of investors,'' he said.
Javier said investors have `had enough'.
``They just want stability in their life.''
The 43-year-old businessman who said he was invested `substantially' in the fund, said ASIC would better serve investors by investigating the activities of the previous management of the fund

 

[great dame]

Re: Octaviar MFS Premium Income Fund PIF

Perhaps 'the rent a crowd' was in fact the PIFI in disguise, haviing seen the error of their ways, trying to make amends for the potential backlash from their actions. But no, it wasn't, just some very concerned PIF holders trying to undo some damage. I'm afraid even with my warped sense of humour, I find nothing funny about this Thealosituation.:nono:Seamisty

Those people there were not PIF Unit Holders Any one with half a brain could see that if they were there But nice try who ever wanted it but it has backfired badley ///

 

[mornaw]

Re: Octaviar MFS Premium Income Fund PIF

Students of economics would find this action a fascinating case study on their own doorstep. Don't knock what you don't know. Congratulations to anybody showing a bit of spirit in pessimistic times.

 

[goldfinger38]

Re: Octaviar MFS Premium Income Fund PIF

goldfinger 38 et al regarding the PIFI LETTER which I have just received today.

In addition to possible breaches of Privacy legislation I decided to refresh my knowledge of various sections of the Corporations Act namely S177 so I pulled up the section on the screen and guess what happened - the phone rang and it was an efficient ASIC Officer returning my call to complain about their action in relation to the WC meeting. He explained that ASIC are not seeking to delay the meeting they simply believe that unitholders should have more information on which to base their decision. Fair enough.

Hi Marcom,

I wasnt saying it was right what they did and yes when I got the letter myself I was not happy to say the least, I was just providing information on how they got unitholders information, the use of the information to do what they did was not right as I agree with you an that front.

But from the reaction it brought about it looks as though it do not do their cause any good and probably created more negativity towards their group.

 

[goldfinger38]

Re: Octaviar MFS Premium Income Fund PIF

This is my first post to this thread after some months of observation.

I had a substantial "investment" in what is the PIF that is now valued (by Wellington) at +/-40% of my investment value. However, the immediate value is 14% which is the value at which I hold the "investment" on my books. I feel that this "Jenny struggles to get value reduced to $0.43 for pensioners" is a load of codswallop. If "Jenny" had any feeling for pensioners then the value would have been pushed at $0.14. An analogy is the valuation of shares. When I bought ANZ last year the "value" was what I could get by selling them on ASX that day, say $30.00, but the value today is what I can sell them for today, say $16.00, and not some Dreamworld Wellington price of $0.43 for the PIF in 5 years time. The true value, today, of the PIF units is $0.14 (or whatever is immediately realisable) NOT the price in 5 years time. If I applied Wellington's logic to ANZ shares then I'd be valuing them at $40.

I see no sense in handing Hutson the keys to $413m. without ever being able to withdraw my funds other than by going through some Mickey Mouse stock exchange in return for $0.06 a unit p.a. plus a possible capital repayment whenever Wellington feels like it. Perhaps I'm wrong but Hutson, her husband, and Chris Scott et al are too closely entwined to be trusted with my money. The NSX has the potential to hand "whoever" control of $400 m. for 20% of that figure.

I would like to see the PIF put into administration to be managed by someone like PriceWaterhouseCoopers with a view to orderly closure of the fund by, say, June 30 2013. This won't be appealing to the "Lady In Red" but it's the only way I'd be happy with.

If Wellington does retain control of the PIF then I recommend you buy a large economy sized jar of KY Jelly 'cause you're gonna get screwed and you'll need something to ease the pain.

Sorry, but just a point of clarification to this post, Jenny Hutson is Single and does not have a husband, this was brought to my attention when I spoke to her last week to clarifiy some questions and I raise the comments about the closeness of her husband to certain events.

 

[goldfinger38]

Re: Octaviar MFS Premium Income Fund PIF

ASIC's actions upset investors:::::Nick Nichols

September 16th, 2008

A SPLIT in the ranks of Premium Income Fund investors spilled on to the streets of Brisbane yesterday.
The Australian Securities and Investments Commission has responded to concerns by some investors that Wellington Capital, headed by Jenny Hutson, was not acting in the best interests of unit-holders, many of them elderly, who poured $770 million into the fund when it was under the control of MFS.
Wellington has proposed a listing to allow cash-strapped investors to sell their units in an open market, but PIF Initiative has argued the price would be at a sharp discount to the fund's value.


Ms Hutson, Wellington's executive director, has said the fund, which has a $55 million exposure to the Raptis Group, was valued at 45c in the dollar as a going concern.Liquidation would only deliver unit-holders 14c in the dollar, she said.
This Thursday's meeting, which will draw investors from as far as Japan, has been called to vote on whether the fund should continue as a going concern and whether Wellington Capital can proceed with its plan to recover all investor funds over the next three to five years.
``They just want stability in their life.''
The 43-year-old businessman who said he was invested `substantially' in the fund, said ASIC would better serve investors by investigating the activities of the previous management of the fund

I am sure that someone said earlier the PIF DONT have any direct exposure to the RAPTIS group and that is wasd the Diversified Fund which had the exposure, can someone please reclarify that point, just goes to show you they still cannot get their facts right.

 

[CableGuy]

Re: Octaviar MFS Premium Income Fund PIF

"What's disappointing from our perspective is that ASIC has left this really late,'' said Ms Hutson.
She said Wellington had provided ASIC with all materials requested at the end of a series of investor forums in July and it had been `well considered' by investors since then.

If ASIC have valid concerns then it doesn't matter when they are raised. Investors didn't recieve anything to consider until the EM was released just over 3 weeks ago so complaints to ASIC weren't going to occur until after this point.

Ms Hutson said Wellington's planned resumption of distributions to investors, who have been told they will receive a total of 3c a unit by Christmas, was also in jeopardy following ASIC's actions.

Distributions can still be made under the current constitution so the only people putting the 3c distribution 'in jeopardy' is WC themselves. Accept my terms or I will withhold your money!

One Sydney investor, who would only identify himself as Javier, yesterday slammed ASIC's actions and backed Wellington's plans for the fund.
"ASIC has intervened to the detriment of investors,'' he said.
Javier said investors have `had enough'.

Based on the previous observation, I wonder why this 'maverick' thinks that ASIC's action is to the detriment of investors?

 

[CableGuy]

Re: Octaviar MFS Premium Income Fund PIF

Please all note that Lonsec has yesterday released a Research Report that recommends that Unit Holders vote in favour of the 3 resolutions.
This is from an independant research house.
Regards,

Buffy99

What Buffy99 failed to metion:

• Lonsec say Wellington does not have the qualitative strengths of experienced personnel or tested processes.

• Given the limited liquidity of the NSX lonsec recognise that a yes vote may not be appropriate for those needing immediate access to cash.

• Few of WC staff have funds management experience being mostly from legal backgrounds.

• WC have the power to extend the 360 day redemption period but are determined not to exercise it’s power to enable an orderly sell down rather than a liquidation. Lonsec ‘s view is that an orderly selldown over a 12 – 18 month period could yield more than the directors estimate of 14 cents and provide some certainty to unitholders in terms of return of capital.

• The 2% RE removal fee is at the upper end of acceptable levels as it equates to the equivalent of 3 years of management fees while one year is considered more normal.

• Had lonsec reviewed WC’s capability under more normal circumstances it is unlikely they would assess well.

 

[Juan Mortyme]

Re: Octaviar MFS Premium Income Fund PIF

I also asked about Raptis, and the buiding that has come up with problems and a liquidator has been appointed has nothing directly to do with us. We (PIF) have NO direct exposure to that particular development. Just another example of inaccurate reporting by the media.

That would explain why when I tried to research the Raptis link, the only connection I could find was with MFS Diversified Group. Seamisty

I am sure that someone said earlier the PIF DONT have any direct exposure to the RAPTIS group and that is wasd the Diversified Fund which had the exposure, can someone please reclarify that point, just goes to show you they still cannot get their facts right.

And Seamisty quoting Nick Nichols from today's GC Bulletin:

ASIC's actions upset investors:::::Nick Nichols

September 16th, 2008

........<SNIP>......
Ms Hutson, Wellington's executive director, has said the fund, which has a $55 million exposure to the Raptis Group,....<SNIP>.....

Seamisty and Maverick. Care to explain?
Has JH been fibbing?

 

[Maverick2802]

Re: Octaviar MFS Premium Income Fund PIF

We've got 3 loans as exposure of $55m. 2 are 1st mortgages with a 66.66% LVR on each the 3rd loan was described in the alternative sector in a hotel..this is the one I am concerned about, apparently it is well secured with fixtures etc. BUT we have heard all this before I guess.

Yes we have got exposure to Raptis (but Raptis is a huge company with many groups), due to privacy loans I could not get specifics, but from what I can gather it is not in the project that has gone to administration as follows:

Raptis Group Ltd on September 12 appointed a receiver to four controlled entities of the group associated with the Southport Central development.

The group is negotiating with potential funding partners for a cash injection, while joint venture funding partners are also being sought for Hilton Surfers Paradise Hotel and Residences development project. The Sheraton Mirage Hotel is on the market, the Iluka development site is for sale or joint venture, other smaller holdings of residual development assets are subject to sale negotiations. The board expects it will take two to four weeks to resolve and document these negotiations.

 

[CableGuy]

Re: Octaviar MFS Premium Income Fund PIF

The information I think WC should provided to investors is:

1) unfunded development contributions

2) financial comparison of an orderly work out by an RE over time versus listed option.

In relation to unfunded development contributions WC must state to investors how they will meet these shortfalls if they exist. This can be done through an overdraft or is done through a capital raising which if it happens in the next 6 months the very people a listing was supposed to be protecting will be decimated by the vultures who can take up the new units at the low price. Investors discounted assets will be diluted away.

-----
"Don't dig to deep or you might get burnt by the molten lava!" - CableGuy

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

And Seamisty quoting Nick Nichols from today's GC Bulletin:



Seamisty and Maverick. Care to explain?
Has JH been fibbing?

I said when I tried to research the loan the only connection I could find was with MFS diversified. Can't you read? Obviously the PIF does have a large exposure to the Raptis Group. Perhaps some of the posters on here with superior intellect should have been able to pick this up earlier. I have absolutely no doubt that it would have been plastered on here by now if it was common knowledge. I am sure there will be a few more disasters like this unfold which are going to need serious legal attention in the recovery of some loans. Obviously that need and the expertise has already been recognised in the LOnsec report. Seamisty

 

[Maverick2802]

Re: Octaviar MFS Premium Income Fund PIF

Based on the previous observation, I wonder why this 'maverick' thinks that ASIC's action is to the detriment of investors?

Well I have been privy to see emails from investors that are in real dire straits suffering from terminal cancer that NEED this 3c distribution, they are actually sweating on the first 1.5c next month to buy expensive medication and treatment just to make their life tolarable.

You may have the luxury of taking as much time as it takes to seek 'alternatives' that don't exist, but to the many long suffering people, they don't. So yes ASIC by this action is of HUGE detriment my friend!!

 

[Rance]

Re: Octaviar MFS Premium Income Fund PIF

Questions

1) When Denis Campbell sent his recent letter to PIF unit holders, was it to all unit holders or just to those who had substantially holdings?

2) If the latter, would this be in breech of privacy laws ie. did the list of unit holders he obtained also contain information other than the unit holders' addresses, eg. number of units held?

Please, would some legal eagle be able to explain any legal implications? Just wondering....

Rance

 

[CableGuy]

Re: Octaviar MFS Premium Income Fund PIF

Well I have been privy to see emails from investors that are in real dire straits suffering from terminal cancer that NEED this 3c distribution, they are actually sweating on the first 1.5c next month to buy expensive medication and treatment just to make their life tolarable.

You may have the luxury of taking as much time as it takes to seek 'alternatives' that don't exist, but to the many long suffering people, they don't. So yes ASIC by this action is of HUGE detriment my friend!!

Mate, as I already stated, there is no reason why WC cannot make the 3c worth of distributions on time irrespective of the outcomes over the next couple of days under the existing constitution.

Are WC proposing to prolong the suffering of those poor investors if things don't go their way in the courts? If so, that is one of the lowest acts imaginable!