Wellington Capital PIF/Octaviar (MFS) PIF

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

Maverick,
How could you possibly make and believe such a statement!!! not unlike a one eyed supporter of a football team which can do no wrong and blames the opposition for everything under the sun LOL!!!! I refer you to CableGuy's post no. 2782, and others along the same lines,where he capably and objectively outlines the statements from WC on one column and the Reality on the other e.g Why did JH decline to put in writing her comment that the 2% fee will not be charged due to poor performance? If she was genuine and above board why wouldn't she agree to put it in writing? Would you not consider this to be deceptive or misleading ????
JH stated that the 2% removal fee is REASONABLE whilst Lonsec advises that a reasonable fee should be approx. 0.7% JH wants 3 times as much!!!!!!!
Are you and other like minded supporters prepared to pay such exorbitant fee ???
Further to the above , how can you honestly say "the only information that was deceptive or misleading was concerning the quarterly distributions"
Is that not sufficient/bad enough for you? you seem to be dismissing it as a triviality !!!
Are the above matters not sufficient for you, and other like minded supporters, to place even some doubts on JH's intentions/ integrity ???
As the the old saying goes, you can lead a horse to water but you can't make him drink it !! not to mention "flogging a dead horse" as has been depicted on here a number of times

Or like a regiment of 700 marching with three believing:jump: they are the only ones in step!!!

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

You were paying MFS 2.35% every year PLUS any overs in the fund. Not just if they proved incompetent. You paid this every year, so 0.7% is CHEAP, with hopefully a lot of work to make the fund healthy. You have misread the Lonsec report, read it again. They say the % are within a reasonable range. ...

Actually, MFSIM's fee was around that figure too, for many years. From memory it was 0.7%. Then the unit holders voted yes to MFSIM's proposal to remove the 0.7% flat fee and install a 'performance only' fee + the Support Mechanism.

The current fee structure had only been in place for about (from memory) 18 months before the big freeze.

Little did we know that MFS would artificially jack up the 'performance' by buying massive numbers of units, i.e. 60M units (approx 8% of the fund based on 60M/755M) the day before the end of the 06/07 financial year. Or at least it looks like that in the Annual report.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Actually, MFSIM's fee was around that figure too, for many years. From memory it was 0.7%. Then the unit holders voted yes to MFSIM's proposal to remove the 0.7% flat fee and install a 'performance only' fee + the Support Mechanism.

The current fee structure had only been in place for about (from memory) 18 months before the big freeze.

Little did we know that MFS would artificially jack up the 'performance' by buying massive numbers of units, i.e. 60M units the day before the end of the 06/07 financial year. Or at least it looks like that in the Annual report.

MFSIM probably borrowed money from the PIF to buy them as well, Duped.Under the new renumeration structure, they were also entitled to receive surplus funds from the trust. I have been told WC will not be doing this. Seamisty

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

MFSIM probably borrowed money from the PIF to buy them as well, Duped.Under the new renumeration structure, they were also entitled to receive surplus funds from the trust. I have been told WC will not be doing this. Seamisty

You're absolutely correct Seamisty. My post wasn't clear. The 'performance' Management Fee was the surplus income generated by the fund at the end of every month after the distributions, withdrawals and expenses were "satisfied". Whatever this really meant, the end result is MFSIM got a bucket load more.

My point still stands though. If anyone thinks 0.7% is cheap then so was MFSIM in the earlier days. 0.7% seems good to me but I'm no 'Financial Advisor' with their presumably extensive level of knowledge of these things.

 

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

You're absolutely correct Seamisty. My post wasn't clear. The 'performance' Management Fee was the surplus income generated by the fund at the end of every month after the distributions, withdrawals and expenses were "satisfied". Whatever this really meant, the end result is MFSIM got a bucket load more.

My point still stands though. If anyone thinks 0.7% is cheap then so was MFSIM in the earlier days. 0.7% seems good to me but I'm no 'Financial Advisor' with their presumably extensive level of knowledge of these things.[/QUOTE]

Hopefully it will prove to be inexpensive rather than "cheap"!

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Hopefully it will prove to be inexpensive rather than "cheap"!

Too true.

 

[Juan Mortyme]

Re: Octaviar MFS Premium Income Fund PIF

Slightly off topic but related nonetheless, City Pacific has announced the proposal for their First Mortgage Fund to list on the ASX.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Slightly off topic but related nonetheless, City Pacific has announced the proposal for their First Mortgage Fund to list on the ASX.

City Pacific wanted to pay $5mill for our PIF with further instalments depending on the performance of the PIF loan portfolio back in February, but the $5mill was to be paid in CIY shares which were valued at approx $3.20 then and are now worth 16cents. Wonder what our PIF would be worth now if CIY had of got its hands on it. Seamisty

 

[Maverick2802]

Re: Octaviar MFS Premium Income Fund PIF

City Pacific wanted to pay $5mill for our PIF with further instalments depending on the performance of the PIF loan portfolio back in February, but the $5mill was to be paid in CIY shares which were valued at approx $3.20 then and are now worth 16cents. Wonder what our PIF would be worth now if CIY had of got its hands on it. Seamisty

I shudder to think. I remember reading the interest of CIY at the time and my stomach turned and I prayed that they would not take over PIF.

Hey Y, do you think this is why Kalinda Cobby said we could do a lot worse than having our fund in the hands of Jenny Hutson after the first Sydney investor forum?

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

City Pacific wanted to pay $5mill for our PIF with further instalments depending on the performance of the PIF loan portfolio back in February, but the $5mill was to be paid in CIY shares which were valued at approx $3.20 then and are now worth 16cents. Wonder what our PIF would be worth now if CIY had of got its hands on it. Seamisty

$5M for the RE or the fund itself?

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

$5M for the RE or the fund itself?

It is my understanding it was for the Fund. Plus further payments based on performance, still trying to find the articleSeamisty

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Found the article, written by Michael West so can't vouch for the content::::27th Feb
Just a few weeks ago, property developer City Pacific was mooting a $1.3 billion takeover of MFS - naturally this was $1.3 billion worth of share certificates rather than cash.

But this week, it declined to put a cash instalment of $5 million on the table to buy the MFS Premium Income Fund (PIF).

City Pacific is a high-risk proposition and needs to either do a deal or raise some money urgently.

BusinessDay understands that City's offer for PIF was shunned by MFS and its advisors from insolvency firm Korda Mentha.

Ironically, with MFS anticipating the private equity mob CVC to stump up $409 million for its 65 per cent stake in leisure group, Stella, MFS has access to more cash than City Pacific.

With the $1.3 billion scrip proposal dead, City chairman Phil Sullivan had gone back to MFS with an indicative offer for PIF in the order of $60 million. The idea was City would pay $5 million or so upfront then further instalments depending on the performance of the PIF loan portfolio.

PIF had raised $770 million when it floated and lent the funds to property developers.

Redemptions to the fund are frozen while MFS works through its solvency nightmare but PIF loans tipped in $16 million last year and there is some $3 million cash left in the tin.

City had its eye not only on the PIF assets but also on the fund's 11,000 investors which could have delivered Sullivan and Co. a new distribution platform to raise some more money.

After the usual argy-bargy in an exclusive negotiation period, MFS is understood to have told its suitor it might deal on the original offer of $5 million or so upfront for a staggered total of $60 million.

City, however, resiled from its original pitch and, instead, offered to pay MFS in City Pacific shares. MFS however deemed the approach not good enough for PIF even though MFS and PIF are suspended and desperate to sell assets to get their its own obligations down.

It's not a good look for City which recently revealed it had deconsolidated two mortgage funds from its accounts. City has more than $1 billion in retail investors funds which it on-lends to property developers, including itself.

There is cash in the funds but the parent, City Pacific, is down to $2.7 million cash as at December. Although it declared a net profit of $27.5 million for the December half, it was $20 million cash-flow negative on operations and showed $102.5 million in debts due this year in its balance sheet statement under current liabilities.

In the notes to the accounts, City revealed it had deconsolidated two mortgage funds, the City Pacific First Mortgage Fund and the City Pacific Income Fund which meant the parent would ``no longer provide the funds with financial support in the event of a loss so as to maintain unitholder distribution rates''.

Things are not pretty.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

I shudder to think. I remember reading the interest of CIY at the time and my stomach turned and I prayed that they would not take over PIF.

Hey Y, do you think this is why Kalinda Cobby said we could do a lot worse than having our fund in the hands of Jenny Hutson after the first Sydney investor forum?

I wonder if she was suprised someone wanted to even take it on board in its damaged state!!!!

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

What's this mean for PIF? PTQ attacked our creditor claim for the $50M Support Mechanism in court. Has PIF been out maneuvered? If so then I wonder if we can retrieve the $5M or so extra MFSIM got in fees in exchange for the Mechanism. I doubt it. Wow, what a great fund PIF has been. Now I can begin to understand what it's like to be in an abusive relationship. We've been 'owned'.

"Insolvency riddle at Octaviar
Article from:
Ben Butler
September 17, 2008 12:00am
THE administrator of finance flop Octaviar is to investigate claims that the company was insolvent two years ago and whether he can claw back payments made during that time.
John Greig, of Deloitte, told BusinessDaily it was too early to tell whether he would ask creditors owed about $1 billion to liquidate the company or approve a deal handing control back to directors of the failed Gold Coast company.
The directors called in Mr Greig on Saturday, and on Monday New York-based vulture fund Fortress followed by appointing receivers to safeguard a $60 million loan.
Mr Greig said he had not been in recent contact with executive director Chris Scott, who seized control of the company in a May boardroom coup.
"Physically I've got no idea where he is," Mr Greig said.
Mr Scott is believed to be in Singapore.
Mr Greig said that "given the nature and complexity" of Octaviar, he would ask the court for at least 60 additional days to investigate its failure before reporting to creditors.
He said he would investigate whether any payments made could be clawed back because they were preferential.
Under the Corporations Act, payments are preferential if they are made while the company is insolvent and result in the creditor collecting more than they would if the company was wound up.
"What we're looking to do is identify what are potential preference recoveries, how much they are, to which parties and I suppose the complexities and likelihood of being able to make those recoveries," Mr Greig said.
Mr Greig has indirect control of Octaviar's $157 million in cash, which is held by a company in the group but not under administration.
He said it was also too early to tell how much the company's assets might be worth.
"There are all sorts of assets and we need to understand what they are and what they're valued at," he said.
He said he expected directors to propose a deed of company arrangement broadly similar to Octaviar's previous proposals to creditors.
"Needless to say they (directors) are looking at revising that and working on it at the moment."
A first meeting of creditors is set for next Wednesday."

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Duped this is from the court transcript in relation to the Support facility. I think the PTQ were just trying to reduce the claim made by WC on behalf of the PIF so there would be more left in the kitty come divvy up time time. I think they were unsuccesful unless my interpretation is incorrect. Seamisty:::::::::[44] The first matter concerns the so called Support Mechanism which was a transaction
entered into between PIF and Octaviar Limited on 23 June 2006. Octaviar earned
fees from PIF and by this agreement Octaviar agreed in certain circumstances to
provide financial support to the fund by payments to its responsible entity. On
26 February 2008, Wellington, as the responsible entity, called upon Octaviar to pay
$50 million pursuant to this instrument. Octaviar has not paid, but accepts that
$50 million is payable. The Public Trustee argues that there is the potential for this
transaction of June 2006 to be avoided pursuant to s 588FE(3). It is also suggested
that the demand of 26 February 2008 would be an act done for the purpose of giving
effect to the transaction and otherwise within the definition of “insolvent
transaction” in s 588FC, with the potential for the operation of a six month
relation-back period under s 588FE(2). So only if the relation-back day becomes
4 June 2008, would the June 2006 transaction be within the two year period under
s 588FE(3), and the demand of 26 February 2008 be within the six month period in
s 588FE(2).
[45] It appears that when this submission was made it was the first that those on the
respondents’ side had heard of a suggestion that this might be a voidable
transaction. But more generally, they say it is the first that they have heard of the
suggestion that Octaviar Limited may have been insolvent as early as June 2006.
For the Support Mechanism to be avoided, it would have to be shown that the
company was insolvent at the time it entered into the agreement or became
insolvent as a result of it. It was suggested that there was some indication of
insolvency from the fact that later in 2006 and in early 2007, the Group borrowed
heavily such as by issuing these Notes. But at least at present, that is no indication
of insolvency in 2006 and the Public Trustee’s suggestion involves mere
speculation. Ultimately the submission for the Trustee went no higher than that a
liquidator would be interested to enquire about the solvency of Octaviar in
mid-2006, and that something might emerge. As to the call made in February 2008,
it is difficult to see that it could constitute an uncommercial transaction, but if so it
is comfortably within a two year period on any alternative.::::

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Seamisty, I understand that much. See my post #2724; page 137. (Viewed from our perspective the decision looks like an invitation for PTQ to have a go: "But at least at present, that is no indication of insolvency in 2006 and the Public Trustee’s suggestion involves mere speculation. Ultimately the submission for the Trustee went no higher than that a
liquidator would be interested to enquire about the solvency of Octaviar in
mid-2006, and that something might emerge. As to the call made in February 2008, it is difficult to see that it could constitute an uncommercial transaction, but if so it is comfortably within a two year period on any alternative.")

But as you know the part of the offer to creditors that relates to PIF covers more than $147.5M + $50M. From recollection there's about another $35M.

What about all these, and other transactions? And does it effect PIF's $147.5M claim - in any way?

The creditor meeting at Deloittes was supposed to be at 10.30 this morning so there might be an announcement soon.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Seamisty, I understand that much. See my post #2724; page 137. (Viewed from our perspective the decision looks like an invitation for PTQ to have a go: "But at least at present, that is no indication of insolvency in 2006 and the Public Trustee’s suggestion involves mere speculation. Ultimately the submission for the Trustee went no higher than that a
liquidator would be interested to enquire about the solvency of Octaviar in
mid-2006, and that something might emerge. As to the call made in February 2008, it is difficult to see that it could constitute an uncommercial transaction, but if so it is comfortably within a two year period on any alternative.")

But as you know the part of the offer to creditors that relates to PIF covers more than $147.5M + $50M. From recollection there's about another $35M.

What about all these, and other transactions? And does it effect PIF's $147.5M claim - in any way?

The creditor meeting at Deloittes was supposed to be at 10.30 this morning so there might be an announcement soon.

Well lets hope that JH can negotiate a better deal for the PIF than the proposed $44mill previous cash offer. Shame she can't say "We'll settle for the 35% of stella in exchange for the PIF debt", since the figure bandied around the value of that was around $215mill. Before anyone jumps on my case, there is no harm in wishfull thinking, JH being such good friends with CS and all.:dance:Seamisty

 

[sugar3157]

Re: Octaviar MFS Premium Income Fund PIF

Hi Seamisty all, does anyone know whether MFS/ Octaviar was insolvent prior to Nov 2007?

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Hi Seamisty all, does anyone know whether MFS/ Octaviar was insolvent prior to Nov 2007?

I don't know who makes that ruling Sugar, I would have thought if there was actual evidence it would have been trotted out by now.Justice McMurdo made the decision in the Supreme Court of Brisbane for OCV not to go into liquidation. It would sure open a can of worms though, since OCV shares were still trading on the ASX until 22 JAN this year. Who is responsible ASX, ASIC? One would think all the companies, banks, institutions etc who loaned OCV millions during this period of time would have done due dilligence. Seamisty

 

[erniel]

Re: Octaviar MFS Premium Income Fund PIF

Further to the enquiry of what Octavier owe the PIF ,I refer to a post approx 2 months ago and attach.

Hi All,
As per the financials of the MFS PIF fund dated the 31 December 2007,
below are investments with related parties of the MFS PIF.
The independence of the auditors was not compromised.
$ 000
1.MFS Living and Leasure Group $57,489
2.MFS Pacific Finance LTD $23,586
3.MFS Causeway Private Debt opportunties Fund $23,180

Further to the above the RE of the PIF have also invested our funds in what they term equity securites which are investments in the following related entities.
$000
1.MFS Living and Leasure Group $ 5,906
2.MFS Diversified Group $34,469
3.MFS Blue Sky Development Trust $ 2,265
4.MFS Property Trust no.7 $ 1,056
5.MFS Maximum Yield Fund $85,000
--------------
Total exposure of the PIF to MFS/Ocv $232 ,951 ,000.00

This amount was as 31 December 2007.

erniel: