Wellington Capital PIF/Octaviar (MFS) PIF

Re: Octaviar MFS Premium Income Fund PIF

I thought I would make a few comments on Breakers feedback from WC and things that dont make sense.

Firstly fantastic job done Breaker in terms of getting the information and WC position but also in presenting it in understandable manner.

The three things that stand out and dont make sense are:

1) The returns. PIF had $770 million plus the $180 million RBOS loaned out or invested and supposedly earning a return from interest of dividends.

Now to get rid of ROBS we know some damage was done but it must leave a balance of loans and investments earning a return and therefore able to pay investors a return. Why do you need to dip into capital to make up the return. This is not paying a return it is repaying a debt owed to investors.

The second point is in relation to the guarantee.

The wording of the guarantee as posted in an extract reads that the guarantee remains as the RE has not changed.

WC has bought all of the shares in the the existing manager and it is now I assume a 100% subsiduary of WC and not replaced and so therefore OCV has no out clause.

For WC to become manager they would need to call a meeting and have you vote to have her existing AFSL replace the current company she has just bought.

Therefore the call that only WC could have aquired the RE and have the guarantee honoured potentially is saying that OCV was only prepared to hand management rights to a friendly party who would do a deal on the $50 million or else they would have put the sword to the PIF to avoid having to deal with a third party in relation to guarantee,. If that is true that would open up alll sorts of issues for the old and new board of OCV and the RE.

The other issue I am still grappling with is LLA

For those with an ability to read financials go and read the 31 December 2007report of this company.

This is a strong profitable business that if PIF converted its $63 million in debt to equity plus LLA raised another $27 million through a rights issue is a little powerhouse and in a position to refinance the bank.

WC needs to be able to replace NAB and based on NTA of LLA plus PIF conversion it would not be a major hurdle.

It is my firm belief that PIF can stand in the place of Artic and in one transaction claw back the damage that has been done.

LLA has real cashflow businesses plus enormous potential for development profits and can deliver ongoing returns to PIF.

Why take a haircut when you can capture value from the position of only ranking second to NAB.

In putting money where my mouth is I am hopimg to have a financial institution contact WC tomorrow who is capable of replacing NAB in LLA should RE not receive a satisfactory offer from Artic and they exercise their power as second ranking creditor in LLA.

Artic is not in the box seat PIF is as long as WC has an alternative banking solution for LLA.

Re: Octaviar MFS Premium Income Fund PIF

UPDATE #7 (Part 2) [see also Part 1, #304, page 16]

PIF LISTING ON THE NSX

Jenny wants to stabilize the fund first before listing, by refinancing away from the RBOS and getting them out of our hair - this should be done soon. Everything ($) is going to RBOS at present. WC apparently is not getting any fees from the fund as yet.

Considering that the NSX listing diverges dramatically from the PIF PDS, doesn't WC have to put the listing of the PIF onto the NSX, to all investors first, for a vote at either a general meeting or by vote letters posted to investor?
No! This is a matter for the board of WC to determine.

What will be the structure of the PIF when listed?
It will be a parallel structure - both structures will be in units - units in the PIF fund and same units on the NSX - not shares. Percentage units PIF to Percentage units NSX.

If units lose or gain value on the NSX will that change the value of one's units in the PIF?
No! Units in the PIF will remain the same regardless of the value of your units on the NSX.

If I sell my units on the NSX, will my units vary in the PIF unit fund?
Yes! When you sell your units on the NSX, your PIF units then will reduce according to the number of units that you sell on the NSX.

What is the benefit of listing to investors?
A vehicle for capitalisation mainly and a vehicle for investors wanting to redeem parallel NSX funds urgently. Redemption of funds will be available to investors after listing. Jenny said, she knows there are a group of investors who are not prepared for a long workout to realize their funds (i.e., immediate liquidity).

Will investors be able to redeem units out of the PIF fund directly (as opposed to the NSX) and when?
Yes! Jenny will advise investors of this at forum meetings, won't know the time of PIF redemption offers till at least 7 July. But it is not expected to be full redemptions, only part redemptions, and probably only a percentage every quarter along with distributions every quarter. Percentage amount not given ( have a gut feeling it will probably be a workout %, so probably low - breaker). I think that might only be if redemptions are requested by the investor first (breaker). I assume, partial PIF redemptions will reduce NSX units, but forgot to ask (breaker).

It appears redemptions will be delivered somewhat similar to Donovan, Oats, Hannaford Fund (Pt MacQuarie), which is already in receivership (PWC?) - which is a % payout quarterly, over time. Donovan Oats investors are being paid out over 3-4 years as the fund realizes (sold) assets coming in & they are expected to get 70% of their investment back, but if you take into consideration loss of interest and inflation over 4 years that will be closer to 50% in reality - (but don't quote me on info in this paragraph and the 50% / 70% amounts relate to Donavon Oats only - breaker)

PIF fund redemption will really need a more clear explanation at the forums.

Can you project the value of $ units either on NSX or PIF now?
No! PWC to advise - answer probably 7 July.

Fee structure for PIF in paying WC for its services as RE manager
Jenny will propose a fee structure that is expected to be less than 1%. Will you be structuring a bonus scheme for getting investors more than existing cents in $? Jenny didn't think of that & will consider it. A modest bonus structure would be an ideal incentive for Jenny to maximize our return above what it may be already after advised by PWC (breaker). Will need to discuss this when net assets are quantified.

A letter mailout will be required here by WC for investors to vote as to whether they agree or not to WC fee's structure as outlined.

WC can't get a fee till investors vote and not till after first investor distributions.



What impartial body will handle the letter mailout and count the votes?
Perpetual Nominees.
I take it then, that they will still be the trustees of the fund?
Yes!
Oh Boy!

Why do you think that listing another middle finance income fund loaner on the NSX will be good, you know that they are on the nose with Super Fund managers and financial advisors, just take a look at City Pacific they are a similar fund listed and their share value has dropped from over $4 to around 35c in the last 4 months?
The answer to this was in the vicinity of: we are approaching various financial market investors & stockbrokers, with specific interest in this kind of fund and interest in the NSX. After debt is paid & fund is stabilised, the fund will be presented as healthy & viable & very stable & with a complete transparency, that big investors like. (much healthier than the troubled CP, I took it). The NSX as opposed to the ASX, is considered less expensive and we will be the largest trust in their. It is considered better to be a big fish in a small pond, than vicaversa, for profitable functioning. WC feels confident it can generate buyer enthusiasm from the market for it's optional listing.

Jenny offered, that she doesn't see the NSX listing as a panacea - it is not going to solve all PIF problems. It is simply a part of the larger formulae for getting maximum value for the fund and allowing choice for investors. [If you don't sell your NSX units, PIF fund units will remain the same and managed hopefully better than before - my interpretation (breaker)]

I pointed out to Jenny, that there has been an initial bad feedback from some investors in our AG and I gave fair warning that there was a problem here. She said, she did not want to proceed in a direction that everyone did not want. She seemed to want the opportunity to sell this NSX listing at forums, as she believed the choice being offered would be of interest to some investors, if they wanted it. Don't want to sell your NSX units don't sell - they will remain as is in PIF.

Jenny sees the fund as a long term business and the managers have to do what's best for the fund and adding the NSX option, is what's best. Believes in giving people a choice.

If memory serves me right, WC will not list till after investor forums.

Jenny said that she will present to investors a plan to reshape the fund (forums and mailouts I guess) and that she is here to listen to investors. In addition to reshaping the fund for long term viability she wants to get cash into peoples pockets.

RECEIVERSHIP OPTION
After my discussions with two finance experts (advisors) and discussing the matter with Jenny - it is concluded that receivership would be a very bad option for investors of the PIF. It would cause fire sales not realizing anywhere near full value, high receiver and solicitor fee's sucking the fund dry. It would realize only 15c to 20 to 30c in $ depending on who I spoke to.

We therefore as an action group could NOT support this option - it's out of the question.



Other points discussed;
Will there still be a PIF office in Sydney?
Yes! (I think the existing WC office)

Will Guy Hutchings & Marilyn Watts still play a role with the new PIF?
Yes! CEO and fund something??
Will Guy Hutchings attend the forums, as investors have questions requiring a historical knowledge of the fund?
Yes!

Financial relationship between Chris Scott and J Hutson
Chris Scott and Jenny did business together for a long time but went our separate ways 18 mths ago. Chris retired and went to Singapore and came out to deal with his loss on the ASX. Jenny asserts she will do all in her power to redeem funds from OCV / MFS entities owing to PIF. Jenny could see that plans were heading towards receivership for the PIF within Octaviar and considered this was the wrong option for the fund. That's where she decided to take up the challenge to make a go of the fund.


As you can see, Jenny gave me a very good hearing and excellent access to her, thus WC. I have to call it as I see it - she is a very pleasant and co-operative person to talk to. She did duck the odd question, but I certainly found her an easy going person, and she was happy to speak with me again and was happy with the idea of a formal communication set up with the AG. She does have a listening ear.

I did explain to Jenny that I represented the AG and thus had to take the view of the AG, so that we might not agree on matters. I did point out the suffering of many investors and the emails I was getting explaining such. Jenny said, she definitely saw the moral aspect of her position over the fund and was mindful of it.

Cover note: As there was a high volume information gathered & a good deal of complexity, please forgive me if I got something wrong or misunderstood some of the info given to me. At times Jenny used terms like: possibilities, only still defining, still juggling, will know by, etc - which can promote misunderstanding by the most intense listener. If errors have been made by me in translating, I will quickly endeavor to correct any mistakes big or small.

Re: Octaviar MFS Premium Income Fund PIF

Thank you SO MUCH Breaker. You truely are amazing, and so generous with your time and energy.

You othr guys(? or women), who are so involved, thank you very much too.

It's made an enormous difference to our lives to KNOW a little about what's going on. It has been intolerable having NO control whatsoever over our life savings.

Just wish I was more learned in the world of money management and the law, and could be of some help here. Just have to be a passenger until you give me some direction in which I can be of service.

Warm Regards to all Mary Lynch

Re: Octaviar MFS Premium Income Fund PIF

Well done breaker1 and thanks again for all this feed back if we the investors were left on our own, I for one wouldn't know where to start.
I'm glad to have you giving us your advice along and time your spending working for this group.
I also want to thank all the other major contributors to this forum and action group for there great input.

Re: Octaviar MFS Premium Income Fund PIF

Javier said:

"Transparent market place"..seems like a crock to me. I was checking out that NSX today..noone trades anything. Who the hell is going to buy our units..at the rightful value? The only way they will sell it at severely reduced prices. Now how is that any different to appointing an administrator and getting 30c per unit. No way, that NSX looks like a joke..only 15 brokers..that's a farce!! Jenny if this is the best way of looking after us, you will not be the long term solution to our problems madame!! Our money will rot there or be sold for a pittance..NO WAY! Let's get a meeting soon!! I am speaking to Tuart and a solicitor to get a committee formed legally and then try and get a meeting where press may be invited prior to the July WC meetings / forums.

I would like to know why we can't vote on a moratorium whereby we get some funds when the bank is repaid, get returns in the interim and then me paid in a timely and orderly manner as all the assets are realised, better to wait a little now and get a decent and fair amount of our money back down the track, than to never be able to get it. I think we are in for a fight to try and own the fund as investors, as if the NSX is JH's answer, we are truly better off without her and WC...WHAT FOR???

I thought she was going to amalgamate her funds under management with ours..she keeps touting how much she controls in WC..so what, how does that help us? An experinced funds manager..she has been in business as WC for 2 years..WOW! Sorry but can anyone else see that this is really starting to stink. Why hasn't this letter gone to investors first???

Click to expand...

Javier do you think that by listing the PIF on the NSX( I had never heard of it before and have been trading shares for 5 years!) this is JH way of locking in investors? ie, making it so financially crippling if you cash out you have no other choice but to leave your money in the Fund long term. And will investors even receive notification? We invested on behalf of our self managed super fund and are classed as wholesale investors and have received no correspondence at all. As Tuart has pointed out, OCV is still responsible for the $50 million under the Support Facility regardless of what WC has negotiated because the Responsible Entity has not changed, WC bought only the management rights to the PIF. Regards, Seamisty

Re: Octaviar MFS Premium Income Fund PIF

Hello to all PIF investors. My wife and I registered as members of the Action Group some time ago, and have been following this thread with great interest. Our thanks go to Breaker and all the other contributors who are able to shed some light on this catastrophic mess.

Like some of the others, we are not learned in financial matters, and do not always fully understand the complexities of the situation. Once again, thank goodness for the contributors who are knowledgeable in these areas!

Could Breaker or another please explain the ramifications of the NSX units as opposed to NSX shares. If, for instance, we currently have 1000 units in PIF, will we have 500 PIF units and 500 NSX units if this scheme goes ahead?

Breaker has made great headway with his J. Hutson interviews. Hopefully, she really is keen to listen to us as investors - only time will tell, of course.

One concern I have regarding the regional forums is that she will not be given a chance to either listen to investors, or clearly describe her own plans. Let's try to keep the emotions to a minimum and speak and listen carefully - shouting, threats, and fist-shaking will not get us anywhere.

I am also concerned that there will not be a balanced representation of knowledgeable investors at all the forums, giving Wellington the chance to say "Oh, well, the only real opposition we encountered was at the Gold Coast (for instance) meeting - all the others went along with us."

We live in sunny Tassie, so will have to fly up to one of the mainland forums. Not sure which one yet, probably Sydney, the airport being handy to the city. Are there any other Tasmanian investors out there?

Regards to all, and keep up the great work you guys, we are very grateful.

Re: Octaviar MFS Premium Income Fund PIF

breaker1 said:

UPDATE #7 (Part 2) [see also Part 1, #304, page 16]

PIF LISTING ON THE NSX

Jenny wants to stabilize the fund first before listing, by refinancing away from the RBOS and getting them out of our hair - this should be done soon. Everything ($) is going to RBOS at present. WC apparently is not getting any fees from the fund as yet.

Considering that the NSX listing diverges dramatically from the PIF PDS, doesn't WC have to put the listing of the PIF onto the NSX, to all investors first, for a vote at either a general meeting or by vote letters posted to investor?
No! This is a matter for the board of WC to determine.

What will be the structure of the PIF when listed?
It will be a parallel structure - both structures will be in units - units in the PIF fund and same units on the NSX - not shares. Percentage units PIF to Percentage units NSX.

If units lose or gain value on the NSX will that change the value of one's units in the PIF?
No! Units in the PIF will remain the same regardless of the value of your units on the NSX.

If I sell my units on the NSX, will my units vary in the PIF unit fund?
Yes! When you sell your units on the NSX, your PIF units then will reduce according to the number of units that you sell on the NSX.

What is the benefit of listing to investors?
A vehicle for capitalisation mainly and a vehicle for investors wanting to redeem parallel NSX funds urgently. Redemption of funds will be available to investors after listing. Jenny said, she knows there are a group of investors who are not prepared for a long workout to realize their funds (i.e., immediate liquidity).

Will investors be able to redeem units out of the PIF fund directly (as opposed to the NSX) and when?
Yes! Jenny will advise investors of this at forum meetings, won't know the time of PIF redemption offers till at least 7 July. But it is not expected to be full redemptions, only part redemptions, and probably only a percentage every quarter along with distributions every quarter. Percentage amount not given ( have a gut feeling it will probably be a workout %, so probably low - breaker). I think that might only be if redemptions are requested by the investor first (breaker). I assume, partial PIF redemptions will reduce NSX units, but forgot to ask (breaker).

It appears redemptions will be delivered somewhat similar to Donovan, Oats, Hannaford Fund (Pt MacQuarie), which is already in receivership (PWC?) - which is a % payout quarterly, over time. Donovan Oats investors are being paid out over 3-4 years as the fund realizes (sold) assets coming in & they are expected to get 70% of their investment back, but if you take into consideration loss of interest and inflation over 4 years that will be closer to 50% in reality - (but don't quote me on info in this paragraph and the 50% / 70% amounts relate to Donavon Oats only - breaker)

PIF fund redemption will really need a more clear explanation at the forums.

Can you project the value of $ units either on NSX or PIF now?
No! PWC to advise - answer probably 7 July.

Fee structure for PIF in paying WC for its services as RE manager
Jenny will propose a fee structure that is expected to be less than 1%. Will you be structuring a bonus scheme for getting investors more than existing cents in $? Jenny didn't think of that & will consider it. A modest bonus structure would be an ideal incentive for Jenny to maximize our return above what it may be already after advised by PWC (breaker). Will need to discuss this when net assets are quantified.

A letter mailout will be required here by WC for investors to vote as to whether they agree or not to WC fee's structure as outlined.

WC can't get a fee till investors vote and not till after first investor distributions.



What impartial body will handle the letter mailout and count the votes?
Perpetual Nominees.
I take it then, that they will still be the trustees of the fund?
Yes!
Oh Boy!

Why do you think that listing another middle finance income fund loaner on the NSX will be good, you know that they are on the nose with Super Fund managers and financial advisors, just take a look at City Pacific they are a similar fund listed and their share value has dropped from over $4 to around 35c in the last 4 months?
The answer to this was in the vicinity of: we are approaching various financial market investors & stockbrokers, with specific interest in this kind of fund and interest in the NSX. After debt is paid & fund is stabilised, the fund will be presented as healthy & viable & very stable & with a complete transparency, that big investors like. (much healthier than the troubled CP, I took it). The NSX as opposed to the ASX, is considered less expensive and we will be the largest trust in their. It is considered better to be a big fish in a small pond, than vicaversa, for profitable functioning. WC feels confident it can generate buyer enthusiasm from the market for it's optional listing.

Jenny offered, that she doesn't see the NSX listing as a panacea - it is not going to solve all PIF problems. It is simply a part of the larger formulae for getting maximum value for the fund and allowing choice for investors. [If you don't sell your NSX units, PIF fund units will remain the same and managed hopefully better than before - my interpretation (breaker)]

I pointed out to Jenny, that there has been an initial bad feedback from some investors in our AG and I gave fair warning that there was a problem here. She said, she did not want to proceed in a direction that everyone did not want. She seemed to want the opportunity to sell this NSX listing at forums, as she believed the choice being offered would be of interest to some investors, if they wanted it. Don't want to sell your NSX units don't sell - they will remain as is in PIF.

Jenny sees the fund as a long term business and the managers have to do what's best for the fund and adding the NSX option, is what's best. Believes in giving people a choice.

If memory serves me right, WC will not list till after investor forums.

Jenny said that she will present to investors a plan to reshape the fund (forums and mailouts I guess) and that she is here to listen to investors. In addition to reshaping the fund for long term viability she wants to get cash into peoples pockets.

RECEIVERSHIP OPTION
After my discussions with two finance experts (advisors) and discussing the matter with Jenny - it is concluded that receivership would be a very bad option for investors of the PIF. It would cause fire sales not realizing anywhere near full value, high receiver and solicitor fee's sucking the fund dry. It would realize only 15c to 20 to 30c in $ depending on who I spoke to.

We therefore as an action group could NOT support this option - it's out of the question.



Other points discussed;
Will there still be a PIF office in Sydney?
Yes! (I think the existing WC office)

Will Guy Hutchings & Marilyn Watts still play a role with the new PIF?
Yes! CEO and fund something??
Will Guy Hutchings attend the forums, as investors have questions requiring a historical knowledge of the fund?
Yes!

Financial relationship between Chris Scott and J Hutson
Chris Scott and Jenny did business together for a long time but went our separate ways 18 mths ago. Chris retired and went to Singapore and came out to deal with his loss on the ASX. Jenny asserts she will do all in her power to redeem funds from OCV / MFS entities owing to PIF. Jenny could see that plans were heading towards receivership for the PIF within Octaviar and considered this was the wrong option for the fund. That's where she decided to take up the challenge to make a go of the fund.



I did explain to Jenny that I represented the AG and thus had to take the view of the AG, so that we might not agree on matters. I did point out the suffering of many investors and the emails I was getting explaining such. Jenny said, she definitely saw the moral aspect of her position over the fund and was mindful of it.

Cover note: As there was a high volume information gathered & a good deal of complexity, please forgive me if I got something wrong or misunderstood some of the info given to me. At times Jenny used terms like: possibilities, only still defining, still juggling, will know by, etc - which can promote misunderstanding by the most intense listener. If errors have been made by me in translating, I will quickly endeavor to correct any mistakes big or small.

Click to expand...

Great job breaker1, we appreciate the tremendous work you are doing.
If the PIF is now separate and access to its money has been denied to QPT,NAB etc it is now ridiculous to
go into receivership and allow liquidators to give that access back to them.
Revival of the fund as a working entity appears to be a far better option and receiving our income again would allow us time for the fund to build up to full value.

We do not see any value in the NSX listing perhaps there are benefits that we are not aware of. We agree that the option of looking at LLA more closely has merit and may prove a better outcome than accepting whatever portion Arctic decide we should get of the $63m.
It is important that the AG in various parts of Australia get together before any of the planned WC meetings start.
We are on the Gold Coast and would like to help if possible.

Keep up the good work breaker and everyone who is working toward a good solution for all of us investors.

Re: Octaviar MFS Premium Income Fund PIF

Dear all

To help remove some of the work load from breaker people are welcome to email me on adam.thorn@optusnet.com.au. Whilst I am busy I will tryto reply ASAP.

I would also encourage all investors located in Melbourne who have not yet contacted me to do so via this email so we can get a Melbourne meeting organised prior to the forums due in July and elect a representative for our region to be part of the AG committee

Re: Octaviar MFS Premium Income Fund PIF

It's great we are growing in numbers. I believe Tuart is right that we need to get some sort of incorporated body together to create some sort of structure. A Sydney lawyer is currently looking into this and some other issues. She is in Sydney, maybe if we set up a committee then invite membership from other investors paying a small fee, to enable costs of legals, communication etc. (non profit), we can then be a point of receiving ideas, offers, opprotunities and general communication and then be able to feed back that information to members..just a thought.

I think JH is looking for a way to keep us bound to the fund for as long as possible min 4-5 years and if you can't hold on you cash in your chips at the NSX for whatever someone is willing to buy them for. That is the way I read it..there must be a finite amount of time to redeem our funds and still get the max amount back. Don't like the idea of distributions being a combination of interest and capital..we might only get 2% interest and the rest a portion of capital..very deceiving and NOT attractive!

I believe LLA is the way to claw back value in PIF that has been lost BUT I fear that judging by today's article in AFR and the fact the LLA share price has risen, that JH has already done the deal with Arctic concerning how they will take on the $63m debt to PIF..and I bet it won't be with PIF taking on equity for debt..more like PIF taking a crappy deal of some money up front now (which will go to RBOS or whovever the new banker will be) and the rest 2 years down the track to MAYBE get back the $63m with no more value added. But of course JH is doing this behind closed doors, so come July 7 we will have NO say and all too late..this way debt is gone / reduced to a point she can recommence distributions, and of course start taking fees from us. What a joke, so predictable AND there is JACK we can do at this stage. It makes me sick.

Also, Breaker thanks for the info, even though she changes things a bit depending on what day you speak to her. Will the distributions be based on the % rate of the amount our unit was based before the turmoil or the reduced unit rate. Like say she decides we will get a 7% return paid qtrly, does that mean 7% of say you had $100k invested or 7% of the new "deemed" unit price like say $70k if new unit price is deemed at 70c in the $??

Re: Octaviar MFS Premium Income Fund PIF

Javier

Agree with everything as i am sure lots of others do, this is why we need to get the ball rolling on forming an AG committee starting with meetings in capital cities and other high investor areas so we can elect reps from each region to form the committee (this needs to be completed in the next week or 2).

I have spoken to someone at Octaviar this morning and he suggested that if investors don't want NSX then we could have the power to stop it but we need to move on forming a committe NOW, not next week.

I have put my hand up for melbourne and already have some supporters. We need organisers in other areas.

Re: Octaviar MFS Premium Income Fund PIF

I am willing to put my hand up for Sydney, but for business reasons I don't want to be the chairman or anything like that, so as my name may appear in a publication of any sort. If Sydney people want to contact me email
jmcustoms@bigpond.com

Re: Octaviar MFS Premium Income Fund PIF

Rocky1 said:

Javier

Agree with everything as i am sure lots of others do, this is why we need to get the ball rolling on forming an AG committee starting with meetings in capital cities and other high investor areas so we can elect reps from each region to form the committee (this needs to be completed in the next week or 2).

I have spoken to someone at Octaviar this morning and he suggested that if investors don't want NSX then we could have the power to stop it but we need to move on forming a committe NOW, not next week.

I have put my hand up for melbourne and already have some supporters. We need organisers in other areas.

Click to expand...

Breaker is understandably reluctant to pass on contact details so if a Brisbane and Gold Coast Action Group member is willing to form a sub-committee they would have to provide a contact point on the forum and be willing to organise a meeting of sorts with other investors/members. Any takers? I am sorry I can't do it for you but distance is a problem. Regards, Seamisty

Re: Octaviar MFS Premium Income Fund PIF

Hi All,

The NSX idea turns my stomach but I am wondering what the alternative is if we assume the majority of PIF investors are going to (and have probably already) asked for a redemption?

Thanks again to everyone (esp Breaker, Rocky, Seamisty, Javier, Tuart) for your efforts!

Regards,
Dora.

Re: Octaviar MFS Premium Income Fund PIF

Following on from some comments made by Javier regarding the debt owed by LLA to PIF.

In March/April of this year while the fund was frozen (ie RBOS calling shots) further advances were made by PIF to LLA.

LLA had already defaulted on its own NAB facility.

Now it appears that PIF is been forced to do a deal at a loss on this loan to allow Artic to get control of LLA and allow RBOS to be paid back. ( you take a loss so RBOS gets 100 cents in the dollar)

Given that RBOS green lighted the further advance to LLA could it not be argued that if they are now forcing investors to take a loss to get their money back they are a party to creating a loss and are now in the firing line for investor actions.

THis whole LLA deal smells.

NAB are owed 125 million against $300 million plus of assets with LLA easily able to service this debt based on its cashflows. The default I believe relates to market capitilsation and nothing to do with underlying value of assets.

How did Artic get in the box seat as WC have stated they are. PIF is the second ranking creditor and WC should have the resources to bring in a banker and take Artic's place. If they cant they are the wrong people for this job.

I hope it is not the case that Packer through Artic gets control of LLA for going easy on OCV through Challenger position as major creditor of OCV.

WC would do better by PIF to bring in its own banker to replace NAB and exercise its rights as a major creditor of LLA. LLA if required could have an administrator put into it as PIF would be the driver of any reconstruction scheme as the major creditor assuming WC with their resources can line up a banker.

There is something very smelly going on here. WC needs to come clean with what deal they have struck or will strike and the real reasons why that deal was struck.


Jenny Hutson had all the details on the consortium I was aware of who sought to acquire the RE and had extended their expression of interest to LLA and this group is only a phone call away. If WC does not have resouces they should be bring in partners who do.

I will find out if she has made a call to this consortium to seek assistance and those in contact with her should be putting pressure on her to find out what deal she has struck or proposes to strike with Artic.

Re: Octaviar MFS Premium Income Fund PIF

Tuart, Just rang Jenny..she was in a meeting so I sent her an email. I copy / pasted your last post and asked her to comment. Hope we can get a good outcome for us all with LLA debt..we need some good news on a deal that will claw back some of the huge losses already incurred by PIF!!!

Re: Octaviar MFS Premium Income Fund PIF

I am willing to place a public notice in the local newspaper to advertise this action group's forum site.
Before doing so does anyone think this is a good idea as I beleive there are other investors in PIF from Geelong that don't know whats going on and I think if they can read this forum they might get a understanding of whats happening and it might encourage them to join the action group.

Re: Octaviar MFS Premium Income Fund PIF

The reason I suggested the appointment of a liquidator (as opposed to a receiver) is the Fund would be managed UNDER OUR INSTRUCTIONS. The liquidator is our nominated RE.

We could control our own destiny.

He would report to us and act on our behalf. No fire sales or hidden agenda's.

The liquidator is also obliged to lodge a report with the ASIC if they believe an offence has been committed.

Last years annual report 2007 shows our Fund had operating expenses of $19,687,000 (including $1.26m to Perpetual Nominees). These are annual expenses.

A liquidator would cost a fraction of this. As capital flowed back into the Fund it would be distributed to Unitholders.

We would have immediate access to to all documentation and a true valuation of the assets.

While we would not receive quarterly distributions we would receive intermittent capital repayments. When the last loan is payed back to the Fund and distributed, the Fund would be finalized, hopefully in my lifetime, as opposed to the alternative proposal with Guy Hutchings at the helm.

We could be kept in the dark for years without knowing the real value of our holdings.

I will happily bow to better judgement so would be pleased to hear your informed comments.

Re: Octaviar MFS Premium Income Fund PIF

Just a small observation regarding this Breaker1 thread. If you type PIF Blog into Google (Aust. pages only), the thread is listed as number five on the Google index. It might be that there are far many more hits taking place than we imagine. Can only hope that's the case.

Re: Octaviar MFS Premium Income Fund PIF

Is poke to the national manager of the PIF today and he said that in December last year the fund was worth $950 million. This included assets acquired using the loan facility from RBOS (i.e the loan was entered into to acquire assets). In December last year $40 million was paid out in redemptions, therefore according to my calculation this would make the fund worth $910 million. If to date approx $120 million has been paid back to RBOS (through various means including the sale of assets) this would make the fund worth $790 million less the outstanding debt (approx $65 million) therefore worth $725 million.

I know these are broad figures but JH is now stating the fund is worth $690 million therefore where has the balance of $35 million gone.

Just a reminder Melbourne AG members can contact me on adam.thorn@optusnet.com.au and Sydney members can contact Javier on jmcustoms@bigpond.com to register interest in holding meetings prior to the July forums being arranged by WC for the purpose of consolidating a committee for the AG and to discuss questions to be raised at the forums to ensure we maximise the time

Re: Octaviar MFS Premium Income Fund PIF

A big thank you to breaker and Rocky for their hard work.

I'm adding my No vote to the NSX listing.
As much As I have tried to see what possible benefits the NSX may have such as transparency of assets.
I cant see how Investors can ever be happy on a unknown and untried service which will no doubt take time to realise our Investments and cost the Fund or Investors a fee to have our units sold through specific brokers.

I am not too pleased that Hutchins and watts are still associated and collecting a fee. Its also dissapointing that perpetual have still got their hand in there for being trustee in name only.

I think It would be a good time to start organising ourselves - I'm in sydney, it would be good if we can start having some numbers to see who would like to be interested in committee representation.

Cheers