Wellington Capital PIF/Octaviar (MFS) PIF

Re: Octaviar MFS Premium Income Fund PIF

From a quick read of the press on the PTQ/Octaviar court action, it looks like the PTQ is asserting that MFS/Octaviar was insolvent when it sold 65% in Stella, although Octaviar has supplied the court with "factual information" that this was not the case.

If the PTQ's argument succeeds they are asking the Court to undo the deal.

Also this argument could in theory be applied to MFS's sale of $147.5m dud loans into PIF?

All will be revealed when the judgement is delivered 4PM tomorrow.

Re: Octaviar MFS Premium Income Fund PIF

kogo said:

Hi all. I started looking at this thread quite sometime ago and quit responding and looking after 2 days due to the content. Bit of a pity it didn't get closed down then to sort things out rather than a week or so before the vote. I also e-mailed my name/address to the AG and got no response.

I sent my vote in the other day however I'm regretting one thing now. I'm all for WC to try and resurrect this fund and start paying some sort of a return with the hope that in 3-5 years they can restore a unit value to a dollar. It's my feeling that going down the long term road is better than a wind up that will get eaten away in fees and time etc.

My regret though is the NSX thing. I see the point of providing a marketplace for short term invsetors to get out if they want, but it should be exactly that - a short term period or an added option. If the value of the fund increases as per WC plans than the fund should be able to redempt once it's liquid. This should/could be reviewed based on finacial statements etc every 6 months or so.

Can anyone add more insight to this. Is there a way to make sure that the NSX is not the only way to redempt?? Especially for long term investors.

If you respond please do so only on what I've asked as I've already read the negative/positive stuff.

Click to expand...

Kogo I am against listing on the NSX i spook to WC about this Was told it will remain an exit for investors now & in the future / Dane //

Re: Octaviar MFS Premium Income Fund PIF

kogo said:

Hi all. I started looking at this thread quite sometime ago and quit responding and looking after 2 days due to the content. Bit of a pity it didn't get closed down then to sort things out rather than a week or so before the vote. I also e-mailed my name/address to the AG and got no response.

I sent my vote in the other day however I'm regretting one thing now. I'm all for WC to try and resurrect this fund and start paying some sort of a return with the hope that in 3-5 years they can restore a unit value to a dollar. It's my feeling that going down the long term road is better than a wind up that will get eaten away in fees and time etc.

My regret though is the NSX thing. I see the point of providing a marketplace for short term invsetors to get out if they want, but it should be exactly that - a short term period or an added option. If the value of the fund increases as per WC plans than the fund should be able to redempt once it's liquid. This should/could be reviewed based on finacial statements etc every 6 months or so.

Can anyone add more insight to this. Is there a way to make sure that the NSX is not the only way to redempt?? Especially for long term investors.

If you respond please do so only on what I've asked as I've already read the negative/positive stuff.

regards

Click to expand...

Hi Kogo, No one is entirely happy with all of WC proposals but most are of the same opinion as you. I am hoping that in 3-5years when the Fund has stabilised that WC will reassess the fuutre direction in regards to redemptions. To grow the PIF and take it foward at a later date, there will have to be other options to exit or the Fund will not be attractive to future investors. I am hoping to discuss this issue with JH next month and know of others who fully intend to do the same in person. No one will be able to predict the state of the economy in 3-5 years and this will be the largest factor and have the most impact on the performance on the Fund. Regards, Seamisty

Re: Octaviar MFS Premium Income Fund PIF

Juan Mortyme said:

In the article on Raptis in today's AFR it says the following:

"It is understood the Premium Income Fund has a $50 million-plus exposure to Raptis but its manager, Jenny Hutson, declined to comment."

Seems to just get worse and worse.

link: http://www.afr.com/home/viewer.aspx...&title=Raptis+creditor+calls+in+the+receivers

Click to expand...

Yes, that's bad for both the YES and NO sides of the debate!

Rance

Re: Octaviar MFS Premium Income Fund PIF

Octaviar court decision drags on::Shannon Willoughby

September 11th, 2008

ADMINISTRATORS or liquidators will be appointed to Octaviar by tomorrow, ending a lengthy court battle between the Public Trustee of Queensland and company directors.

Yesterday, the Queensland Supreme Court reserved its decision on the fate of the debt-laden company, formerly known as MFS.

It is understood the court has until tomorrow when the injunction on the company's right to appoint administrators expires.

Directors of the company, which owes creditors $900 million, want to move into voluntary administration.

However, the public trustee, acting on behalf of Octaviar noteholders owed $347 million, is pushing ahead for a liquidation, ignoring a payout offer that expires on September 30.

The public trustee launched a bid to wind up Octaviar in June.

Under a winding-up, Octaviar's assets would be sold off immediately.

Under voluntary administration, directors can remain in their jobs and assets can be sold off more gradually.

Creditors include the Premium Income Fund, OPI Pacific Finance and Challenger Financial Services Group.

In July, Octaviar put forward a plan to pay out all of its unsecured creditors, some of them in full.

Holders of listed Octaviar notes were offered 100c in the dollar for the first $5000 they invested, and 22.5c in the dollar for anything above $5000.

The offer needs the support of at least 75 per cent of noteholders to proceed.

The same offer was extended to Challenger, owed $100 million, and the Jenny Hutson-controlled Premium Income Fund ($197.5 million).

Octaviar also owes OPI Pacific Finance $246 million, the National Australia Bank $40 million and the Australian Taxation Office $53 million.

Company director Chris Scott last night said administration was the better outcome for creditors.

He said winding-up Octaviar, which has cash in the bank of $150 million, was not a viable option.

"They have extended the injunction until Friday and until the judge makes his decision we won't know anything," he said.

"Liquidation is the worst option. We owe $900 million and the noteholders are owed $340 million of that, which is around 35 per cent.

"At the end of the day we've got to do what's best for all the creditors."

Insolvency specialist KordaMentha, after a review of Octaviar's operations earlier this year, forecast a January liquidation of the then-MFS would have delivered creditors just 5c in the dollar.

Mr Scott said if the company went into liquidation in the current market, creditors would receive, at best, 13.9c in the dollar.

Octaviar chief executive Craig Chapman last night declined to comment on the case until a decision was handed down

Re: Octaviar MFS Premium Income Fund PIF

Sydney Morning Herald - today, very recent:

http://news.google.com.au/news/url?...&cid=0&usg=AFQjCNGHSoayR69JVR0vCLbXq7TRl7i5BA

Re: Octaviar MFS Premium Income Fund PIF

Article from todays SMH

ASIC must step in
• Michael West
• September 12, 2008 - 9:25AM
Unless the Australian Securities & Investments Commission takes a stand on behalf of the beleaguered 10,000 unitholders in the old MFS Premium Income Fund (PIF), these investors will lose the bulk of their savings.
Many PIF investors believe the only options available to them are to either accept the offer by Wellington Capital to run their fund, or watch it liquidated at 14c a unit.
They have been led to believe a "no" vote means liquidation and therefore losses. This is wrong. ASIC needs to step in. Now that PIF's parent Octaviar (the old MFS) is bound for administration and PIF has $200 million in claims to pursue, the imperative for clear and independent instructions is even greater.
The best outcome for PIF would be the orderly work-out out of the fund's external investments and loan book and a return of capital to investors.
The best way for PIF investors to achieve this would be to vote "no" to the Wellington proposal and appoint their own manager to wind-up the fund and pursue any legal claims.
Wellington chief Jenny Hutson has been on a roadshow pitching for the vote from PIF unitholders to restructure and list their fund on the NSX (National Stock Exchange - formerly Newcastle).
Investors should ask themselves if they really want to be locked into a fund listed on an illiquid market paying large fees to a manager who is yet to make enough relevant disclosures.
Wellington had secured the management rights under questionable circumstances from Octaviar in the first place. Octaviar is now run by her former associate and client Chris Scott. For his part, Scott wants to get some money out of Octaviar since he vended his businesses S8 into the old MFS for scrip. That scrip now looks worthless.
For its part, Wellington wants to permanently capture PIF by making it a listed fund. This would appear to be the best outcome for Wellington - who captures millions in fees - but is it best for PIF?
PIF unitholders have a choice, says Hutson. They can vote "yes" to approve Wellington as manager and take stock worth 45c a unit listed on the NSX. She estimates the asset backing at 45c but given the state of the listed property market PIF would trade at a large discount to 45c - especially as Wellington would likely put the hand out for more capital at some stage.
Under the Wellington proposal there is a raft of fees, both cheeky and onerous. There is even a severance fee of 2% of gross assets so PIF
would have to pay $8 million to Jenny just to see her off.
Wellington to gee up a 75% "yes" vote to get control. PIF investors need to know they have other choices. In fact they can dump Wellington altogether and appoint their own RE (Responsible Entity). The RE ought to be simply a manager the 10,000-odd unitholders in PIF can trust and who can preside over an orderly sale of their assets.
As PIF is not the only train wreck unfolding on the Gold Coast - there is City Pacific and others - the sooner they unwind the fund the better prices they will get for their assets.
mwest@fairfax.com.au

Re: Octaviar MFS Premium Income Fund PIF

Wellington to gee up a 75% "yes" vote to get control. PIF investors need to know they have other choices. In fact they can dump Wellington altogether and appoint their own RE (Responsible Entity). The RE ought to be simply a manager the 10,000-odd unitholders in PIF can trust and who can preside over an orderly sale of their assets.

All well and fine. Very simple. Well where is that RE? Who will it be? Geeze, they love making these statements from behind their cushy desk, but like the PIFI motivated group inspiring the same articles to be written, offer NO certainty. People want certainty, they NEED certainty.

Obviously by the way the vote seems to be going they feel WC can offer that and have less faith in what ASIC would bring to the table.

Re: Octaviar MFS Premium Income Fund PIF

This is what was written by Adam Schwab in Crikey on the 3rd July 2008

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

Now, or later, or never. The Financial Review reported today that "managers of the $755 million [Ovtaviar] Premium Income Fund will urge unit holders not to place the stricken entity into liquidation." Instead, PIF boss, Jenny Hutson (who is a close associate of Octaviar chief, Chris Scott), has begged unit-holders to give PIF management another five years. Hutson stated that if court action against Octaviar (which was the former responsible entity of PIF) was successful, and the fund recovered the $147.5 million claimed, the value of units in PIF would top "65 cents in the dollar". However, Hutson noted that "my vision over three to five years is to work with the investors to get them a full return of capital. So for every $1 invested, they will get at least $1 back."

Of course, waiting five years isn’t ideal for investors who are familiar with the cornerstone concept of "opportunity cost". If unit-holders have the choice between 65 cents now (assuming the Octaviar claim is successful) and a possible $1.00 in five years, it would be difficult to opt for the $1.00. A mythical 65 cents invested now in a term deposit paying a mere 7% would be worth 91 cents after five years. And one would suspect investors would opt for a near guaranteed 91 cents rather than leaving the far riskier option of having their money tied up in PIF for another five years. Hutson will be hoping unit-holders don’t agree -- presumably management fees wouldn’t be particularity lucrative after the Fund is liquidated. -- Adam Schwab
--------------------------
direct link: http://www.crikey.com.au/Business/20080703-Briefly-Business-Octaviar-Just-.html

Re: Octaviar MFS Premium Income Fund PIF

Juan Mortyme said:

This is what was written by Adam Schwab in Crikey on the 3rd July 2008

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

Now, or later, or never. The Financial Review reported today that "managers of the $755 million [Ovtaviar] Premium Income Fund will urge unit holders not to place the stricken entity into liquidation." Instead, PIF boss, Jenny Hutson (who is a close associate of Octaviar chief, Chris Scott), has begged unit-holders to give PIF management another five years. Hutson stated that if court action against Octaviar (which was the former responsible entity of PIF) was successful, and the fund recovered the $147.5 million claimed, the value of units in PIF would top "65 cents in the dollar". However, Hutson noted that "my vision over three to five years is to work with the investors to get them a full return of capital. So for every $1 invested, they will get at least $1 back."

Of course, waiting five years isn’t ideal for investors who are familiar with the cornerstone concept of "opportunity cost". If unit-holders have the choice between 65 cents now (assuming the Octaviar claim is successful) and a possible $1.00 in five years, it would be difficult to opt for the $1.00. A mythical 65 cents invested now in a term deposit paying a mere 7% would be worth 91 cents after five years. And one would suspect investors would opt for a near guaranteed 91 cents rather than leaving the far riskier option of having their money tied up in PIF for another five years. Hutson will be hoping unit-holders don’t agree -- presumably management fees wouldn’t be particularity lucrative after the Fund is liquidated. -- Adam Schwab
--------------------------
direct link: http://www.crikey.com.au/Business/20080703-Briefly-Business-Octaviar-Just-.html

Click to expand...

Hell yeah we would all take 65c now, but that is not what we would get if it was liquidated now would we!!! Even if the NO vote got up, it would still take 3-5 years of an admin workout to get 45c with the possibility of no income in the process.

Re: Octaviar MFS Premium Income Fund PIF

Juan Mortyme said:

This is what was written by Adam Schwab in Crikey on the 3rd July 2008

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

Now, or later, or never. The Financial Review reported today that "managers of the $755 million [Ovtaviar] Premium Income Fund will urge unit holders not to place the stricken entity into liquidation." Instead, PIF boss, Jenny Hutson (who is a close associate of Octaviar chief, Chris Scott), has begged unit-holders to give PIF management another five years. Hutson stated that if court action against Octaviar (which was the former responsible entity of PIF) was successful, and the fund recovered the $147.5 million claimed, the value of units in PIF would top "65 cents in the dollar". However, Hutson noted that "my vision over three to five years is to work with the investors to get them a full return of capital. So for every $1 invested, they will get at least $1 back."

Of course, waiting five years isn’t ideal for investors who are familiar with the cornerstone concept of "opportunity cost". If unit-holders have the choice between 65 cents now (assuming the Octaviar claim is successful) and a possible $1.00 in five years, it would be difficult to opt for the $1.00. A mythical 65 cents invested now in a term deposit paying a mere 7% would be worth 91 cents after five years. And one would suspect investors would opt for a near guaranteed 91 cents rather than leaving the far riskier option of having their money tied up in PIF for another five years. Hutson will be hoping unit-holders don’t agree -- presumably management fees wouldn’t be particularity lucrative after the Fund is liquidated. -- Adam Schwab
--------------------------
direct link: http://www.crikey.com.au/Business/20080703-Briefly-Business-Octaviar-Just-.html

Click to expand...

Hi Seamisty all, what do you think of this article...
I would rather have my 65c now...
How can we get 65c now?

Re: Octaviar MFS Premium Income Fund PIF

Juan Mortyme said:

This is what was written by Adam Schwab in Crikey on the 3rd July 2008

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

Now, or later, or never. The Financial Review reported today that "managers of the $755 million [Ovtaviar] Premium Income Fund will urge unit holders not to place the stricken entity into liquidation." Instead, PIF boss, Jenny Hutson (who is a close associate of Octaviar chief, Chris Scott), has begged unit-holders to give PIF management another five years. Hutson stated that if court action against Octaviar (which was the former responsible entity of PIF) was successful, and the fund recovered the $147.5 million claimed, the value of units in PIF would top "65 cents in the dollar". However, Hutson noted that "my vision over three to five years is to work with the investors to get them a full return of capital. So for every $1 invested, they will get at least $1 back."

Of course, waiting five years isn’t ideal for investors who are familiar with the cornerstone concept of "opportunity cost". If unit-holders have the choice between 65 cents now (assuming the Octaviar claim is successful) and a possible $1.00 in five years, it would be difficult to opt for the $1.00. A mythical 65 cents invested now in a term deposit paying a mere 7% would be worth 91 cents after five years. And one would suspect investors would opt for a near guaranteed 91 cents rather than leaving the far riskier option of having their money tied up in PIF for another five years. Hutson will be hoping unit-holders don’t agree -- presumably management fees wouldn’t be particularity lucrative after the Fund is liquidated. -- Adam Schwab
--------------------------
direct link: http://www.crikey.com.au/Business/20080703-Briefly-Business-Octaviar-Just-.html

Click to expand...

That aricle was incorrect when it was written over 3 months ago to the effect that unitholders were never going to receive 65 cents immediately with or without the whole amount being recovered from OCV. The 65cents quoted was only as an ONGOING CONCERN . I don't see the point in re posting an old incorrect media article, what are you hoping to achieve? Seamisty

Re: Octaviar MFS Premium Income Fund PIF

seamisty said:

That aricle was incorrect when it was written over 3 months ago to the effect that unitholders were never going to receive 65 cents immediately with or without the whole amount being recovered from OCV. The 65cents quoted was only as an ONGOING CONCERN . I don't see the point in re posting an old incorrect media article, what are you hoping to achieve? Seamisty

Click to expand...

So maybe you now have to wait 3 to 5 years to reach the 65 cent mark?

Re: Octaviar MFS Premium Income Fund PIF

Michael West's SMH article is weeks too late. For months many of us have called for ASIC to check things out.(Is he subtly suggesting that the vote be called off?) The depressing read in some ways can help us - it means increased scrutiny of WC's strategies. Can't see that it will change voting patterns at this late stage, but JH is now well and truly in the critics' spotlight. She may even have put her brand name on the line. This will certainly motivate WC to deliver on their promises. Hardly a good day for WC public relations!

Re: Octaviar MFS Premium Income Fund PIF

Juan Mortyme said:

So maybe you now have to wait 3 to 5 years to reach the 65 cent mark?

Click to expand...

You were always going to have to wait for at least 3 years, with the full recovery of $147million from OCV and a lot of hard work and good business decisions from a whole team of professional, dedicated managers!!!! That is why for the life of me I can't see why a few investors think they could possibly recover 45cents short term by winding up the Fund without taking the cost of a team of expensive professionals to do the administrating into consideration. Talk about tunnel vision!! Seamisty

Re: Octaviar MFS Premium Income Fund PIF

selciper said:

Michael West's SMH article is weeks too late. For months many of us have called for ASIC to check things out.(Is he subtly suggesting that the vote be called off?) The depressing read in some ways can help us - it means increased scrutiny of WC's strategies. Can't see that it will change voting patterns at this late stage, but JH is now well and truly in the critics' spotlight. She may even have put her brand name on the line. This will certainly motivate WC to deliver on their promises. Hardly a good day for WC public relations!

Click to expand...

That's exactly the way I see it selciper. She will be under that much scrutiny from all parties, including ASIC and the media. It will really define what she is made of. It's funny how noone mentions the fact that she is willing to allow a 3 person investor committee. Now she didn't have to bring this in, yet there has been no media commentary on this.

Anyone here nominating. I think it should represent a good mix. ie I would vote for seamisty (good businness knowledge and a successful investor and great in people communiaction) in the for camp, dora in the against camp (is situated geographically close and is very thorough and patient in detail and suggests a good understanding of legal ramifications and financial documents) and in the insto side RickH, he has a vast understanding of funds management and would have lots of contacts to perhaps help claw back value plus many investors to bring pressure in numbers if we should require that.

Your thoughts??

Re: Octaviar MFS Premium Income Fund PIF

selciper said:

Michael West's SMH article is weeks too late. For months many of us have called for ASIC to check things out.(Is he subtly suggesting that the vote be called off?) The depressing read in some ways can help us - it means increased scrutiny of WC's strategies. Can't see that it will change voting patterns at this late stage, but JH is now well and truly in the critics' spotlight. She may even have put her brand name on the line. This will certainly motivate WC to deliver on their promises. Hardly a good day for WC public relations!

Click to expand...

I have been told by WC that they are under constant scrutiny from ASIC. The whole explanatory memorandum had to be approved by ASIC before it was released. Perhaps Michael West should have asked for a comment from ASIC and the majority of investors in the PIF who have chosen to support WC before offering unprofessional financial advise which could result in a far worse financial outcome for unitholders. A very poorly researched article with dodgey content in my opinion. Seamisty

Re: Octaviar MFS Premium Income Fund PIF

So all you yes voters are saying that all the Media have got it wrong ??? Remember those writers have got to be careful what they write Really sad it has come so late But you never know the NOES may come charging through yet need only 25% plus ONE / Dane //

Re: Octaviar MFS Premium Income Fund PIF

Wouldn't be the first time the media has got it frightfully wrong and it certainly won't be the last.

Newspapers are owned by billionaires who use media outlets as a means to voice their own agendas to manipulate markets and political outcomes to suit their own money making schemes. They are very rarely held accountable.

An alarmist headline will always attract more readers than a warm and fuzzy one. It's ALL about sales and circulation!

Re: Octaviar MFS Premium Income Fund PIF

Maverick2802 said:

Wouldn't be the first time the media has got it frightfully wrong and it certainly won't be the last.

Newspapers are owned by billionaires who use media outlets as a means to voice their own agendas to manipulate markets and political outcomes to suit their own money making schemes. They are very rarely held accountable.

An alarmist headline will always attract more readers than a warm and fuzzy one. It's ALL about sales and circulation!

Click to expand...

There is only aout 200 plus menbers on the forum the 10.000 others out there are not reading your posts or mine And the way i see it It is split 50/50 on the forum for the yes & no vote / Dane //