Wellington Capital PIF/Octaviar (MFS) PIF

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

thanks seamisty. your information says wc will pay four times the profit for the first twelve months ,it would have to have been obvious that it was never going to show a profit and if by some mirical of miricals it did i'm sure some creative accounting would take care of that. on the matter of the value of the net tangible assets how is this worked out? i'm guessing that if they can't pay a three cent distribution then the net tangible assets are zero which is the amount that they will pay

Doesn't necessarily follow Sume. It's a question of cash flow. If money they are owed from loans doesn't come in when expected, they can't pay out.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Doesn't necessarily follow Sume. It's a question of cash flow. If money they are owed from loans doesn't come in when expected, they can't pay out.

Exactly JohnH. Hardly rocket science is it? It doesn't take clever, cunning, concealing or cheating (4c's yes?) to determine that if the money doesn't come in theres none to go out. I won't trip over my bottom lip just yet, the year is not over. Seamisty

 

[Jadel]

Re: Octaviar MFS Premium Income Fund PIF

Duped

So you believe their is a possibility that WC have devalued the assets substantially ???

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

Exactly JohnH. Hardly rocket science is it? It doesn't take clever, cunning, concealing or cheating (4c's yes?) to determine that if the money doesn't come in theres none to go out. I won't trip over my bottom lip just yet, the year is not over. Seamisty

WC have to pay four times profit of WIM not four time profit of the PIF.
WC have to pay net tangible assets of WIM not of the PIF.

WIM is no longer the RE of any funds. It won't make a profit in the 12 month period following the acquisition. WC plan for WIM to no longer be a licensed RE and will probably have no assets by March 2009 when the price for the PIF will be calculated.

 

[danger danger]

Re: Octaviar MFS Premium Income Fund PIF

WC have to pay four times profit of WIM not four time profit of the PIF.
WC have to pay net tangible assets of WIM not of the PIF.

WIM is no longer the RE of any funds. It won't make a profit in the 12 month period following the acquisition. WC plan for WIM to no longer be a licensed RE and will probably have no assets by March 2009 when the price for the PIF will be calculated.

I doubt that by a mere name change they will be rid of their obligation to pay nothing for the management rights..seems too easy and I think OCV would be all over WC. It's like racking up a bill on a credit card and then legally changing your name and saying, "hey that person on that credit card is no longer me..so I owe you nothing"...me thinks it ain't that easy to get out of it.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

WC have to pay four times profit of WIM not four time profit of the PIF.
WC have to pay net tangible assets of WIM not of the PIF.

WIM is no longer the RE of any funds. It won't make a profit in the 12 month period following the acquisition. WC plan for WIM to no longer be a licensed RE and will probably have no assets by March 2009 when the price for the PIF will be calculated.

I guess it won't be the only fund not recording a profit in that time frame, most managed funds were showing a minus 6-7% return for the first half of the year and I am sure that figure would be higher now.Seamisty

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

I guess it won't be the only fund not recording a profit in that time frame, most managed funds were showing a minus 6-7% return for the first half of the year and I am sure that figure would be higher now.Seamisty

The profit of the fund is irrelevant. It's the profit of the RE that we are talking about. I.E. If OCV IM (now known as WIM) were to get fees in the 12 month period following the acquisition then WIM would probably make a profit.

 

[JohnH]

Re: Octaviar MFS Premium Income Fund PIF

The profit of the fund is irrelevant. It's the profit of the RE that we are talking about. I.E. If OCV IM (now known as WIM) were to get fees in the 12 month period following the acquisition then WIM would probably make a profit.

So Dora, would the payments to Octaviar be due from Wellington or the PIF?

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

I doubt that by a mere name change they will be rid of their obligation to pay nothing for the management rights..seems too easy and I think OCV would be all over WC. It's like racking up a bill on a credit card and then legally changing your name and saying, "hey that person on that credit card is no longer me..so I owe you nothing"...me thinks it ain't that easy to get out of it.

A name change from OCV IM to WIM wouldn't affect the obligation but I doubt you can substitute WIM for WC in the following clause. It's an entirely different entity which does more than manage the PIF.
"*A multiple of four times the actual profit of Octaviar Investment Management for the 12 months period following the acquisition; plus
*the value of the net tangible assets of Octaviar Investment Management at the end of that 12 month period."

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

So Dora, would the payments to Octaviar be due from Wellington or the PIF?

The statment says payable by WC.
"In the event the Call Option is exercised, the purchase price payable by Wellington capital for the acquisition of Octaviar Investment Management will be equal to:"

 

[danger danger]

Re: Octaviar MFS Premium Income Fund PIF

Personally I hope WC pays nothing to OCV, they deserve just that...JACK!

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

The profit of the fund is irrelevant. It's the profit of the RE that we are talking about. I.E. If OCV IM (now known as WIM) were to get fees in the 12 month period following the acquisition then WIM would probably make a profit.

OH if thats the case, the distributions should come hard and fast after that 12 month period you reckon? Its not the fact that the PIF did not have the money to give us our divvy, its JH holding out on us until the 12 months is up so then she can qualify for management fees after that date!!! What about overheads and operating costs or is the staff working for free or on a deferred payment scheme? I think JH values her reputation too much to take that risk. Seamisty

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Personally I hope WC pays nothing to OCV, they deserve just that...JACK!

The money WC received from OCV to cover certain fund costs was for the four months to 31st Aug. I would imagine WC would be as desperate for a management fee as unitholders are for a distribution. Seamisty

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

OH if thats the case, the distributions should come hard and fast after that 12 month period you reckon? Its not the fact that the PIF did not have the money to give us our divvy, its JH holding out on us until the 12 months is up so then she can qualify for management fees after that date!!! What about overheads and operating costs or is the staff working for free or on a deferred payment scheme? I think JH values her reputation too much to take that risk. Seamisty

WIM is no longer RE of the PIF! So I am not saying any of what you have just said. Why are costs relevant, they come out of the PIF. What risk are you talking about?

 

[sume]

Re: Octaviar MFS Premium Income Fund PIF

Doesn't necessarily follow Sume. It's a question of cash flow. If money they are owed from loans doesn't come in when expected, they can't pay out.

i understand that but what i can't understand is that if the loans from pif are not being repaid and intrest is not being paid how come jh has taken out loans which i presume are secured by pif assets AT THE RATE OF 20% to prop up failing deals, and if pif could borrow this money why not the receipents of the pif loan . who are the receipents of these loans? is it raptis we haven't heard any thing about that $50000000 debt lately

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

i understand that but what i can't understand is that if the loans from pif are not being repaid and intrest is not being paid how come jh has taken out loans which i presume are secured by pif assets AT THE RATE OF 20% to prop up failing deals, and if pif could borrow this money why not the receipents of the pif loan . who are the receipents of these loans? is it raptis we haven't heard any thing about that $50000000 debt lately

That loan of $9.5million was the remaining part of the $100million outstanding from RBOS when WC took control. It was renegotiated not a new loan. It is due to be repaid by the end of this month. Seamisty

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

Personally I hope WC pays nothing to OCV, they deserve just that...JACK!

The PIF is a major creditor of OCV. WC not paying for the PIF effects us and way more than the OCV shareholders. (In a normal situation creditors have to be paid in full before shareholders get anything.)

The PIF is a major creditor of OCV and wants to see OCV recover as much money as possible to maximise OUR return. As RE of the PIF WC should be pushing the administrator (Deloitte) to pursue the purchaser of the PIF. Conflict of interest here - which hat will Jenny put on when thinking about this one.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Personally I hope WC pays nothing to OCV, they deserve just that...JACK!

I don't think we need to get our knickers in a knot over this issue anyway, I would be very surprised if there will be any profit to split hairs over, more likely a loss. Seamisty

 

[danger danger]

Re: Octaviar MFS Premium Income Fund PIF

I don't think we need to get our knickers in a knot over this issue anyway, I would be very surprised if there will be any profit to split hairs over, more likely a loss. Seamisty

Yeah, we should all go 'commando style', that way we won't get our knickers in a knot! LOL

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

I don't think we need to get our knickers in a knot over this issue anyway, I would be very surprised if there will be any profit to split hairs over, more likely a loss. Seamisty

It’s hard to tell if Seamisty - a rep of the AG realises the significane of this. Here’s extract of an article with JH saying she expects OCV to get north of $20 million for the PIF...

http://business.smh.com.au/business...ith-new-chief-and-new-deal-20080508-2cb7.html
Scott cements Octaviar coup with new chief and new deal
May 9, 2008
...
Octaviar announced it had entered into a "call option deed" granting Wellington Capital rights to buy the management rights over five unlisted Octaviar funds, including the $1 billion Premium Income Fund - where the deposits of its 11,000 unit holders remain frozen.

Octaviar's new "independent" chairman, Paul Manka, said: "The board has recognised it is not in the best interests of creditors, shareholders and other company stakeholders for Octaviar IM to remain a wholly owned subsidiary."

Mr Scott, who inherited a large shareholding in Octaviar through the sale of his listed leisure business S8 two years ago, did not return the Herald's calls.

Wellington Capital's managing director, Jenny Hutson, who joined the Octaviar board last week as part of Mr Scott's coup, said she expected the final purchase price - judging by the current performance of the business - to be "north of $20 million".
This is a far cry from the $1.33 billion that Octaviar's financial services business was worth when its rival, City Pacific, lobbed a merger proposal for it in January.

Ms Hutson said there was nothing untoward in the transaction, which will result in Wellington earning management fees from the funds.

Wellington made $9.2 million in fees and commissions last financial year. Ms Hutson said she would act in the best interests of unit holders in the funds, arguing that she would pursue a $50 million debt from Octaviar and the $67 million owed by MFS Living and Leisure to the Premium Income Fund.

"Our interests are quite different to the people in the Octaviar group," she said.

Ms Hutson noted that Mr Scott was no longer a director or shareholder of Wellington Capital.

For JohnH and Seamisty - I added the underline to the above article.