Wellington Capital PIF/Octaviar (MFS) PIF

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

...
Hello All.
The constitution in Clauses 4.8 and 4.9 does not give the RE power to extend the suspension period for the payment of redemptions beyond 360 days. The constitution in clause 4.9 uses the words "must redeem the units within 360 days".

There is no ability for the RE to indefinitely extend the period of suspension except in the case of an orderly wind up. The suspension period in that case may commence from the date the RE received the notice of a meeting for the consideration of the termination of the scheme.
...

Hi Mutchy,
I agree the constitution says there is a 360 day limit. Is there any law which says the constitution can't be changed?
Also in the case of an orderly wind up isn’t the 360 day limit when the wind up would have to start as apposed to finish as WC seem to indicate.

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

...
$1 by Sept2011/Sept2013 is $1.11/$1.19 indexed (compounded - once per year) at 3.5% inflation.

Per annum the fund would need to achieve to make the target in 3/5yrs:
35%/21% (45c valuation)
30%/19% (50c valuation)
26%/17% (55c valuation)
23%/15% (60c valuation)
19%/13% (65c valuation)

Shall have a go at calcs including qly capital returns.

Without inflation the figures are 30%/17%; 26%/15%; 22%/13%; 19%/11% & 15%/9%
...

3c by Dec and then quarterly capital return (distribution) of 1.5c would return in 3/5yrs 20.5c/34.4c (indexed at 3.5%pa. Or 19.5c/31.5c without adding inflation) Hence, WC would need to simultaneously grow the fund to 90.3c/84.4c (80.5c/68.5c without inflation) to achieve the Sept2011/Sept2013 values of $1.11/$1.19.

With these $ leaving PIF and assuming all 755M units staying in PIF and no new capital; the fund would need to generate the following average quarterly return on investments (AFTER subtracting running costs) (3yr / 5yr)

8.7% / 5.9% (45c valuation)
7.6% / 5.2% (50c valuation)
6.6% / 4.5% (55c valuation)
5.7% / 4.0% (60c valuation)
4.9% / 3.4% (65c valuation)

i.e the equivalent of annual RoI of (e.g. 3.44%*3.44%*3.44%*3.44%=14.5%):
39% / 26% (45c valuation)
34% / 22% (50c valuation)
29% / 19% (55c valuation)
25% / 17% (60c valuation)
21% / 15% (65c valuation)

Ignoring the erosion effect of inflation the quarterly returns would be:

7.8% / 5.1% (45c valuation)
6.7% / 4.3% (50c valuation)
5.7% / 3.7% (55c valuation)
4.8% / 3.1% (60c valuation)
4.0% / 2.6% (65c valuation)

i.e the equivalent of annual returns of:
35% / 22% (45c valuation)
29% / 18% (50c valuation)
25% / 16% (55c valuation)
21% / 13% (60c valuation)
17% / 11% (65c valuation)

Is this about right?

If so, then Michael King has done a lotta damage for WC to try and catchup.

 

[cashstrapped]

Re: Octaviar MFS Premium Income Fund PIF

Just received from JH.

The 3% relies, according to this, on the outcome of the vote, though doesn't explain why, and says that is now only 'anticipates to pay'.

The email doesn't answer my questions, and the return email address, on the standardised email signature is misspelt.




'Thank you for your recent correspondence.
As you are no doubt aware, recent events faced by MFS Limited, which is currently suspended
from ASX, resulted in a significant increase in the number of unit holders in the Fund seeking to
redeem their funds.
While the current Constitution technically allows for redemptions, the responsible entity has
suspended payment on all and any valid withdrawal requests in regards to units in the Fund for a
360 day period, as permitted under the Constitution, and is seeking to amend the Constitution to
remove unit holders rights of redemptions as it will be listed on the NSX.
By now you should have received a voting pack, in preparation for the unit holders meeting, which is being
held on 18 September 2008.
Depending on the outcome of the vote, the responsible entity anticipates being in a position to pay 3 cents
per unit by way of a cash payment, by 24December 2008.
To ensure you have a say in the future of your investment in the Fund, it is important that each unit holder
votes, either by proxy or in person. We look forward to receiving your completed proxy form by 16
September 2008.
Ifyou have any further queries, please do not hesitate to contact our investorrelations team on 1300 854 885
or email
Kind regards'

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Just received from JH.

The 3% relies, according to this, on the outcome of the vote, though doesn't explain why, and says that is now only 'anticipates to pay'.

Page 38, Explanatory Memorandum:::
4.4 No Cash Payments
While in the past Unitholders in the Fund have invested on the basis that cash payments will be made
to Unitholders at various rates, in the current circumstances the responsible entity anticipates being
in a position to pay 3 cents per Unit by way of a cash payment by 24 December 2008.:::: I was told by WC that if the 75% vote for RES1 is not achieved, the Fund will be liquidated. Now unless anyone has concrete evidence to the contrary that the Fund will not be liquidated if the vote is not achieved, why would unitholders expect to receive a distribution if the assets are to be sold and proceeds used to make up the estimated 14cents per unit . Don't forget the Fund still has a outstanding bank debt of $20mill. Seamisty

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Page 6, Explanatory Memorandum::Cash Payments
Recommence
The responsible entity anticipates being in a position to pay 3 cents
per Unit to all Unitholders by 24 December 2008 with the first
payment being made in October 2008, the second in December
2008 and quarterly thereafter::: Once again, the word 'anticipates' is used. I guess this is similar to using words like 'Target rate of Return', in the event the amount is not met. Seamisty

 

[Burnt]

Re: Octaviar MFS Premium Income Fund PIF

Hello All.
The constitution in Clauses 4.8 and 4.9 does not give the RE power to extend the suspension period for the payment of redemptions beyond 360 days. The constitution in clause 4.9 uses the words "must redeem the units within 360 days".

There is no ability for the RE to indefinitely extend the period of suspension except in the case of an orderly wind up. The suspension period in that case may commence from the date the RE received the notice of a meeting for the consideration of the termination of the scheme.

The constitution is available on the www.newpif.com.au website.

Please read the constitution before putting "pen to paper".

Mutchy

Hi Mutchy, please also read clause 4.11 and 4.14 & 4.15. There seems to be plenty of opportunity for the RE to suspend redemptions for whatever period if they feel it is in the best interests of unitholders. Also as Dora says, the constitution can be amended to accommodate the best interests of unitholders.

 

[Burnt]

Re: Octaviar MFS Premium Income Fund PIF

Just received from JH.

The 3% relies, according to this, on the outcome of the vote, though doesn't explain why, and says that is now only 'anticipates to pay'.

The email doesn't answer my questions, and the return email address, on the standardised email signature is misspelt.


Hi Cashstrapped, their explanation would have to be that they are restating their false threat that if they don't get the vote the fund will be liquidated. Liquidation is the only reason that they would not be able to pay the distribution. The fund is obviously quite capable of paying out the 3c distribution whether they get the vote or not.
The threat they are making IS FALSE - THE FUND WILL NOT BE LIQUIDATED.

 

[Burnt]

Re: Octaviar MFS Premium Income Fund PIF

Page 38, Explanatory Memorandum:::
4.4 No Cash Payments
While in the past Unitholders in the Fund have invested on the basis that cash payments will be made
to Unitholders at various rates, in the current circumstances the responsible entity anticipates being
in a position to pay 3 cents per Unit by way of a cash payment by 24 December 2008.:::: I was told by WC that if the 75% vote for RES1 is not achieved, the Fund will be liquidated. Now unless anyone has concrete evidence to the contrary that the Fund will not be liquidated if the vote is not achieved, why would unitholders expect to receive a distribution if the assets are to be sold and proceeds used to make up the estimated 14cents per unit . Don't forget the Fund still has a outstanding bank debt of $20mill. Seamisty

Page 6, Explanatory Memorandum :: Alternatives to Proposed Changes
"Unitholders have a right under the Constitution to call a general meeting and consider other alternatives. If the resolution to change the constitution (as proposed) is not approved and no alternative option is subsequently presented to and approved by Unitholders, the board is of the view that the assets of the Fund will need to be liquidated to enable the net proceeds to be paid to Unitholders."
This means that if an alternative option is presented to and approved by Unitholders, an immediate liquidation would not be necessary.

Again, please consider :-
A NO VOTE DOES NOT MEAN LIQUIDATION OF THE FUND.
A NO VOTE DOES NOT MEAN THE RE CAN WALK OUT.
A NO VOTE DOES NOT MEAN NO DISTRIBUTIONS.
A NO VOTE DOES NOT MEAN MINIMUM RETURN OF CAPITAL.
A NO VOTE MEANS NO LISTING ON NSX AND PROTECTION OF UNITHOLDERS INTERESTS.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Hi all


The fund should be wound up in an orderly fashion (not liquidation) by an RE. For those true believers in WC they can take the 45 cents and invest with WC in a new fund if you think they are such a great fund manager.

With an estimated 13.5% annual return (on a 45cent NTA valuation)on the units in the existing Fund, why would anyone consider opting for another alternative at this point in time? That option will still be there at a later date if WC prove to be a not so great fund manager.Seamisty

 

[Mutchy]

Re: Octaviar MFS Premium Income Fund PIF

Hi Mutchy,
I agree the constitution says there is a 360 day limit. Is there any law which says the constitution can't be changed?
Also in the case of an orderly wind up isn’t the 360 day limit when the wind up would have to start as apposed to finish as WC seem to indicate.

Hi Dora.
You are correct that the constitution can be changed both under the existing and proposed constitutions and the Corporations Act
The proposed constitution upon which we are about to vote strikes out all the clauses to do with redemption including the 360 day clause. Ie vote "yes" for the new constitution and WC do not have to wind up the scheme in 5 months and pay the redemptions at whatever value they can get for the assets; estimated to be 14 cents in the dollar redemption. Under the proposed constitution if a notice of meeting to wind up the company is received the redemptions would already have been suspended.
Under the existing constitution and until the proposed constitution is adopted, Clause 14 covers the possibility of an orderly wind up and in particular Clause 14.16. The start of the suspension of redemptions is from the day the RE receives the notice from a group of members requesting distribution of a notice of general meeting with a resolution to wind up the scheme.
Mutchy

 

[Jerry Maguire]

Re: Octaviar MFS Premium Income Fund PIF

Again, please consider :-
A NO VOTE DOES NOT MEAN LIQUIDATION OF THE FUND.
A NO VOTE DOES NOT MEAN THE RE CAN WALK OUT.
A NO VOTE DOES NOT MEAN NO DISTRIBUTIONS.
A NO VOTE DOES NOT MEAN MINIMUM RETURN OF CAPITAL.
A NO VOTE MEANS NO LISTING ON NSX AND PROTECTION OF UNITHOLDERS INTERESTS.

Major assumptions! If you are wrong what then?

It seems to me the people that vote NO will be in the minority. From the various advisers that control a big portion of this fund, some instos, some large investors and from WC themselves that I have personally spoken to (not assumption), you will find that the minority of you NO voters will represent less than 10% of the vote.

The facts speak for themselves:

*People want income again.
*People want stability again and know what is going on
*There is no other alternative RE
*JH comes accross to the majority investor as an intelligent person who won business woman of the year 2007
*She shows integrity, noone else has come out and put their reputation on the line

I feel it would take 20 different REs to come forth to come out to please the minority here. Everyones ideas of the future of this fund differ according to your investing needs and expectations. There is only WC at this stage to look after 10500 investors and $755m when fully realised. They are over not knowing what will happen. Come the 18th of September, we will all know and start receiving money this year. The ONLY way that WILL happen will be with WC. That is an enormous relief to the majority.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Mutchy, I have a copy of the replacement constitution with the attatched amendments dated 2 June 2008 signed by Jenny Hutson and I can't find clause 14.16 What page are you looking on please. Seamisty

 

[Burnt]

Re: Octaviar MFS Premium Income Fund PIF

Page 6, Explanatory Memorandum :: Alternatives to Proposed Changes
"Unitholders have a right under the Constitution to call a general meeting and consider other alternatives. If the resolution to change the constitution (as proposed) is not approved and no alternative option is subsequently presented to and approved by Unitholders, the board is of the view that the assets of the Fund will need to be liquidated to enable the net proceeds to be paid to Unitholders."
This means that if an alternative option is presented to and approved by Unitholders, an immediate liquidation would not be necessary.

Again, please consider :-
A NO VOTE DOES NOT MEAN LIQUIDATION OF THE FUND.
A NO VOTE DOES NOT MEAN THE RE CAN WALK OUT.
A NO VOTE DOES NOT MEAN NO DISTRIBUTIONS.
A NO VOTE DOES NOT MEAN MINIMUM RETURN OF CAPITAL.
A NO VOTE MEANS NO LISTING ON NSX AND PROTECTION OF UNITHOLDERS INTERESTS.

Hi Jerry,
No assumptions here - just facts based on unitholders rights and RE's responsiblities as per constitution and corporate law.
Love to know where you get your "facts" from regarding investors voting preferences. Have you taken your own poll, if so, how ? Assumptions or is there something you're not telling us ? Hmmm........

The fact is voting for the propositions put forward by WIM will result in unitholders funds being locked in and unitholders rights being diminished.

By the way, like your picture, reminds me of WC's attitude towards unitholders.

 

[simgrund]

Re: Octaviar MFS Premium Income Fund PIF

DEXTER,

If you are still around, please contact me with your E-mail details on private box.
I tried to phone.
Thanks,
Simgrund

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Mutchy, I have a copy of the replacement constitution with the attatched amendments dated 2 June 2008 signed by Jenny Hutson and I can't find clause 14.16 What page are you looking on please. Seamisty

Having just re read the constitution I presume you mean 4.16. That whole section is open for multiple interpretation IMO. I guess at the end of the day, the best lawyer wins. As a matter of interest, did anyone have an investment in the Fund that was not due to be redeemed prior to MAR 09? Seamisty

 

[great dame]

Re: Octaviar MFS Premium Income Fund PIF

Major assumptions! If you are wrong what then?

It seems to me the people that vote NO will be in the minority. From the various advisers that control a big portion of this fund, some instos, some large investors and from WC themselves that I have personally spoken to (not assumption), you will find that the minority of you NO voters will represent less than 10% of the vote.

The facts speak for themselves:

*People want income again.
*People want stability again and know what is going on
*There is no other alternative RE
*JH comes accross to the majority investor as an intelligent person who won business woman of the year 2007
*She shows integrity, noone else has come out and put their reputation on the line

I feel it would take 20 different REs to come forth to come out to please the minority here. Everyones ideas of the future of this fund differ according to your investing needs and expectations. There is only WC at this stage to look after 10500 investors and $755m when fully realised. They are over not knowing what will happen. Come the 18th of September, we will all know and start receiving money this year. The ONLY way that WILL happen will be with WC. That is an enormous relief to the majority.

Good Morning Jerry & welcome to the Forum I read all your inspireing words But you forgot to tell us all how do we ever get our money back & please dont say the NSX Thats not the answer I look forward to your reply reguards / Dane //

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

...
Ie vote "yes" for the new constitution and WC do not have to wind up the scheme in 5 months and pay the redemptions at whatever value they can get for the assets; estimated to be 14 cents in the dollar redemption....

Thank you for your information Mutchy!
Could you please tell me what would happen in the case of a "No" vote and if no other resolutions are put forward by members to change the constitution. WC seem to be saying the scheme would need to have completed liquidation by 31st March 2009. Can you please tell me if this is a requirement in the current constitution?

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Page 6, Explanatory Memorandum :: Alternatives to Proposed Changes
"Unitholders have a right under the Constitution to call a general meeting and consider other alternatives. If the resolution to change the constitution (as proposed) is not approved and no alternative option is subsequently presented to and approved by Unitholders, the board is of the view that the assets of the Fund will need to be liquidated to enable the net proceeds to be paid to Unitholders."
This means that if an alternative option is presented to and approved by Unitholders, an immediate liquidation would not be necessary.

Again, please consider :-
A NO VOTE DOES NOT MEAN LIQUIDATION OF THE FUND.
A NO VOTE DOES NOT MEAN THE RE CAN WALK OUT.
A NO VOTE DOES NOT MEAN NO DISTRIBUTIONS.
A NO VOTE DOES NOT MEAN MINIMUM RETURN OF CAPITAL.
A NO VOTE MEANS NO LISTING ON NSX AND PROTECTION OF UNITHOLDERS INTERESTS.

I have been in contact with several unit holders who have already submitted a YYN vote in the absence of a better alternative having been tabled. Some may have been convinced to vote otherwise if there had been another option put foward earlier, but the indecision and confusion is overwhelming for most. As has been said before, the majority of unitholders are elderly and financially vunerable. They don't have the strength or will to get involved with more stress and long drawn out liquidations or orderly windups taking 3 years. They will go with the flow, (most will probably not even vote unless they want to participate in the buyback). You are only in all likelihood reaching 200-300 unitholders with this forum. I have waited in vain for other prospective suitors, riding white horses, (not polo ponies,)trampling over one another to come and slap their bundles of cash on the table in the rush to secure the rights to this Fund, with nothing but the unitholders best interest their major priority!!!! Get real, any other alternative at this stage will ultimately cost unitholders dearly. Would love to be proved wrong (just for once LOL!!!!!!)Seamisty

 

[Wolfgang]

Re: Octaviar MFS Premium Income Fund PIF

Question to Wellington Capital Limited
1: Resolution 3 Appointment of Wellington Capital Limited as responsible entity
If we vote NO to this will we still have to pay 2% to remove the responsible entity?

I received this “we not have to pay 2% to remove the responsible entity”

We will be voting YNN
Wolfgang

 

[great dame]

Re: Octaviar MFS Premium Income Fund PIF

I have been in contact with several unit holders who have already submitted a YYN vote in the absence of a better alternative having been tabled. Some may have been convinced to vote otherwise if there had been another option put foward earlier, but the indecision and confusion is overwhelming for most. As has been said before, the majority of unitholders are elderly and financially vunerable. They don't have the strength or will to get involved with more stress and long drawn out liquidations or orderly windups taking 3 years. They will go with the flow, (most will probably not even vote unless they want to participate in the buyback). You are only in all likelihood reaching 200-300 unitholders with this forum. I have waited in vain for other prospective suitors, riding white horses, (not polo ponies,)trampling over one another to come and slap their bundles of cash on the table in the rush to secure the rights to this Fund, with nothing but the unitholders best interest their major priority!!!! Get real, any other alternative at this stage will ultimately cost unitholders dearly. Would love to be proved wrong (just for once LOL!!!!!!)Seamisty

Hi All just read above Post And boy do i feel rotten now after reading it Looks like i can kiss good by to 90% of my money now IF that looks like the way the voteing is going Cheers / Dane //