Wellington Capital PIF/Octaviar (MFS) PIF

[akernst]

Re: Octaviar MFS Premium Income Fund PIF

I am hoping after all this time, the managers of the PIF, should now have established the Fund back to a viable entity.

If they cannot do this in our BOOMING economy in Australia, then they never will.

Probably a two year old could have done it by now!

We will never have such boom here ever again.

If they cannot, then they should resign.

 

[sak]

Re: Octaviar MFS Premium Income Fund PIF

Breaker,having been to a few distressed investor meetings,has Jenny mentioned what is the front door formalities with regards to entering the meeting,what information are they expecting from us.(Superfunds,Trusts etc )
Will the faxed form be sufficient proof of identity?

Just to let you know, I got my letter from Jenny today, inviting me to the forum meetings

Trust everyones getting theirs?

BTW - You only have till June 30th to register ("Please RSVP by 30th June")
You can register by fax to 1300 854 893 or by reply envelope.
Considering the notoriously slow mail between QLD & NSW, I feel WC should cut a bit of slack for the short notice RSVP date - way to late for this RSVP date. I just got mine today and its already 23/06/08.

Further, I think we should be able to scan the "Registration Form" with our investor details and date / venue chosen and then, email it back - will follow this up with WC.

It comes with a PIF update June 2008 which really doesn't tell us much we don't know.

Under "How can I get my money out" - only the NSX is mentioned, NOT any starting of quartely payments via the PIF, at a later date, as I was advised. This maybe just those who want all their money out immediately. Need to verify this, either before the meetings or at the meetings. I was sure I did verify it - perhaps Jenny will mention the other quarterly option at the forum.

 

[Jadel]

Re: Octaviar MFS Premium Income Fund PIF

Hi All
Am co ordinating the AG for Brisbane but unfortunately beset by Server problems and am posting on limited time from local library

Should be back on line tomorrow morning

Please contact me on chrisaaa@iprimus.com.au


I think the following post will give investors some idea why the PIF almost certainly recieved an ultimatum from the Royal bank of Scotland and was forced to fire sale assets.

Regards Chris

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

"I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.

"Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

"Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point," he said.

US Federal Reserve and the European Central Bank both face a Hobson's choice as workers start to lose their jobs in earnest and lenders cut off credit.

The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. "The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation," he said.

"The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets," he said.

Kit Jukes, RBS's head of debt markets, said Europe would not be immune. "Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates.

"The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured," he said.

Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.

 

[2CentsWorth]

Re: Octaviar MFS Premium Income Fund PIF

SAK,
What if one has returned his form by post ?

I will be taking an MFS Dividend receipt which shows my ID number, and if need be, will produce my license against it. However, I don't think this amount of formality has been considered, probably just turn up and possibly, sign in. Who else would really be interested in going, other than bludgeoned unit holders.

Akernst,
could you please send me some of your tablets, they're rippers !!
Unfortunately, all monies gained by the fund over this time, have been given to RBOS, and such will be the case until their final payment is made. PwC are currently doing the figures on just how much money collectively, we have left. JH meanwhile, is trying to determine exactly what to do, to bring about what you hentioned. So far her answer is to run parallel units on the NSX, to give those who need or want their money back now, a method of doing so, but at price set by an external "BUYER," which no doubt, would a very much reduced one, assuming there are any BUYERS at all!
Those of us who leave our money in the fund, will eventually start to receive dividends again, and as the fund builds up, should you desire to, you will be able to take up the offer of redemption in due turn. in real unit prices.
This is the reason I am vehemently agains listing on the NSX. This is an offer
to the desperately needy, that comes with a razor in its' hand. Like myself, there are other members who just want the fund to stand up again, and start producing income. and that's good for us.
However, I cannot possbly condone the offer, as it stands, made to those who require immediate withdrawal, by listing on the NSX...There has to be a better way for them...maybe it is, to wind up the fund. This I guess, is what
we are really uniting in strength to fight for.

Breaker1, you lit the torch, and we all see its' light, so let's get Javier rolling!

My thanks to all posters in this FORUM.

 

[sak]

Re: Octaviar MFS Premium Income Fund PIF

Hi Jadel
Just wondering if stock investors panic and cash up, where do they keep there cash,hmmm Banks?

Hi All
Am co ordinating the AG for Brisbane but unfortunately beset by Server problems and am posting on limited time from local library

Should be back on line tomorrow morning

Please contact me on chrisaaa@iprimus.com.au


I think the following post will give investors some idea why the PIF almost certainly recieved an ultimatum from the Royal bank of Scotland and was forced to fire sale assets.

Regards Chris

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

"I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.

"Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

"Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point," he said.

US Federal Reserve and the European Central Bank both face a Hobson's choice as workers start to lose their jobs in earnest and lenders cut off credit.

The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. "The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation," he said.

"The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets," he said.

Kit Jukes, RBS's head of debt markets, said Europe would not be immune. "Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates.

"The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured," he said.

Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Morning all. There is a creditor update just been posted by the ASX under OCV. I can't paste it but will replicate this interesting snippet from the announcement:::In addition to the $50 million claimed under the Support Mechanism previously announced, the RE for PIF has now claimed damages against Octaviar Limited and an Octaviar subsiduary for $147.5 million in relation to investments made by PIF. A claim of this nature was noted as a possibility in the notes to the financial statements at 31 December 2007. ::::::At least the PIF is in the queue as a creditor in the event that OCV is wound up. Regards, Seamisty

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Another media update from Bloomberg.com regarding OCV:::Octaviar Faces More Than A$1 Billion in Claims From Creditors

By Garfield Reynolds

June 24 (Bloomberg) -- Octaviar Ltd., formerly known as MFS Ltd., received fresh creditor demands boosting the total claims against the company and its units to more than A$1 billion ($952 million) after the Public Trustee of Queensland went to court seeking to liquidate the asset manager.

Octaviar and a subsidiary received a A$147.5 million claim from the manager of the Premium Income Fund, adding to an initial A$50 million claim announced earlier, the Southport, Queensland- based company said today in a statement to the Australian stock exchange. OPI Pacific Finance Ltd. on June 19 told Octaviar it was seeking A$270 million.

The company, which borrowed more than twice the value of its assets in the past two years, is being forced to sell assets after running foul of investors as the crisis in the credit markets heightens concerns about indebted firms. Its shares have been suspended since Jan. 18 after plunging 77 percent in the first 11 trading days of the year.

``Octaviar needs to reach an accommodation with its large creditors so as to align the obligations to those creditors with the realization of the Group's assets,'' the company said. ``We continue in discussions with the large creditors regarding such an accommodation.''

The company has acknowledged that the holders of A$100 million in notes have the right to seek immediate repayment of the bonds, initially due in 2011, after the Public Trustee's suit triggered default clauses. The Public Trustee is seeking A$351.5 million from Octaviar.

The Australian Taxation Office also is seeking A$60 million in taxes and interest for the 2007 financial year, exceeding the A$52.2 million tax liability Octaviar recorded in its Dec. 31 accounts.

Octaviar is in discussions with National Australia Bank Ltd., which is seeking A$40 million.

To contact the reporter for this story: Garfield Reynolds in Sydney at greynolds1@bloomberg.net

 

[Javier]

Re: Octaviar MFS Premium Income Fund PIF

We may be in line, but as an unsecured creditor, how much would we get? $147m (is this LLA etc??) damages the PIF made as investments in MFS subsiduaries...I thought under the PIF constitution it could not make direct investments to subsiduaries of parent co MFS? I reckon when all is settled we have a case for suing the professional idemnity policy for MFSIM board as I am sure there were breaches in the manner investments were done, with complete disregard of the constitution, the adverse effects that these decisions may have on investor funds and they were just down right INCOMPETENT..and that CEO of MFSIM is now with WC!!!!

 

[phil lawrence]

Re: Octaviar MFS Premium Income Fund PIF

Hi
Just joined Aussie Stock Forums as one of the disaffected PIF investors. Put me on the action group - not even sure whether I have hit the right buttons to make this happen
Phil Lawrence for SMSF

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Hi
Just joined Aussie Stock Forums as one of the disaffected PIF investors. Put me on the action group - not even sure whether I have hit the right buttons to make this happen
Phil Lawrence for SMSF

Hi Phil, please contact breaker1@aapt.net.com and register your details, welcome to the forum and Action Group, regards, seamisty

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

We may be in line, but as an unsecured creditor, how much would we get? $147m (is this LLA etc??) damages the PIF made as investments in MFS subsiduaries...I thought under the PIF constitution it could not make direct investments to subsiduaries of parent co MFS? I reckon when all is settled we have a case for suing the professional idemnity policy for MFSIM board as I am sure there were breaches in the manner investments were done, with complete disregard of the constitution, the adverse effects that these decisions may have on investor funds and they were just down right INCOMPETENT..and that CEO of MFSIM is now with WC!!!![/QUOTE

Boy, are there sliding panels in this disgraceful saga! Every time I read a post by the likes of Javier and Breaker1, I am thankful. If ever there was a time for investors' cynicism to rise it's now. And WC shouldn't underestimate investors' desire to dig deep into all this. I guess WC overlooked the chances of such a strong-willed Action Group ever forming when they took us over.

 

[Rocky1]

Re: Octaviar MFS Premium Income Fund PIF

Javier

I spoke to a national manager at PIF a couple of months ago and he informed me that the loan with LLA had been negotiated to be secure - hopefully this was correct. From memory we where second in line.

TO ALL

I have attached a draft flier which a member of our Melbourne group has put together for comment. The purpose of the flier is to distribute at local forum meetings to recruit more investors to the AG. Basically there are three fliers per A4 page which means it wont take long to run of and cut up a coupe of hundred.

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

Wondering if the local representatives have considered creating email accounts specifically for their group? It could be a free account like PIFActionGroupBNE at yahoo.com. This would give you the freedom to pass the account on to another member should the need arise. (I.E. holidays or PC problems, or you no longer wish to be the rep). Could also have more than one person monitoring the mailbox if things really get going.

Also, if you want to put an email address on this forum you might want to write it with spaces to stop spambots from collecting your address and spamming you.

 

[wally3218]

Re: Octaviar MFS Premium Income Fund PIF

My biggest complaint is why has'nt ASIC done anything about the breaches OCV/MFS have made.

"ASIC is responsible for the supervision of operators of financial markets and clearing and settlement (C&S) facilities and of market participants"

When you read what they say on their web site I am amazed that they havent done anything. I suspose there waiting till it all goes bust before stepping in.

On another note my mother recieved her letter advising of the forum today and she phone and asked could I accompany her to the meeting and was advised just to add my name to the form and send it back to them.
I definately hope that I wont be refused entry.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

We may be in line, but as an unsecured creditor, how much would we get? $147m (is this LLA etc??) damages the PIF made as investments in MFS subsiduaries...I thought under the PIF constitution it could not make direct investments to subsiduaries of parent co MFS? I reckon when all is settled we have a case for suing the professional idemnity policy for MFSIM board as I am sure there were breaches in the manner investments were done, with complete disregard of the constitution, the adverse effects that these decisions may have on investor funds and they were just down right INCOMPETENT..and that CEO of MFSIM is now with WC!!!!

Javier I'm not sure that the loan to LLA is included in that $147million.I think that is separate again as LLA is a separate listed company and not included in the winding up orders listed by the Public Trustee of Queensland(PTQ) The four affected are 1.Octaviar LTD, 2.Octaviar Investment Notes Ltd, 3.Octaviar Investment Bonds Ltd. 4.Octaviar Financial Services Ltd., So if you include the money owed to the PIF from LLA that accounts for all (plus more)of the $200 million that was owed to the RBOS I have kept several e-mails I received from OCV stating that OCV did not have a loan to PIF and that the money owed the RBOS was used to buy additional assets for the PIF. I also received a letter from Guy Hutchings on the 7th May stating::'There has been a recent change to the conditions of the LLA loan. The loan term has been extended by 1 month to the 30th June 2008 on condition that once LLA's main secured lender has been repaid , LLA grants an all assets fixed and floating charge and real property mortgages over the freehold and leasehold real property to the PIFto secure an amount of up to $45 million. This may provide unit holders with improved security for the loan facility to LLA.':::Regards, Seamisty

 

[zixo]

Re: Octaviar MFS Premium Income Fund PIF

My biggest complaint is why has'nt ASIC done anything about the breaches OCV/MFS have made.

"ASIC is responsible for the supervision of operators of financial markets and clearing and settlement (C&S) facilities and of market participants"

When you read what they say on their web site I am amazed that they havent done anything. I suspose there waiting till it all goes bust before stepping in..

Wally3218,

I agree with your view on the investigation and attitude by ASIC regarding the PIF.

Fincorp, ACR and Westpoint are companies who ASIC has been Investigating for years now, and as far as I know No-one has been convicted of any wrong doing... yet.

MFS/Octaviar PIF is bigger than all those companies with many more investors.

My complaint also centred on the Auditors for The PIF.
Did they do their job properly?

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

Not looking good for OCV LTD:

OPI joins the MFS litigation queue
By Mitchell Hall
Tuesday June 24 2008 - 05:43pm

OPI Pacific Finance will line up alongside two Australian companies, today suing stricken parent company Octaviar (formerly MFS) for A$270 million ($340 million).

The Public Trustee of Queensland, a trustee for investors with listed notes in Octaviar, has served the company with a notice asserting a default event has occurred. It sought repayment in full of its A$348 million notes, plus interest by June 5 this year. The notes would otherwise have matured in 2011.

EDIT (from another article on same story) under:
The claim for damages from Octaviar is related to the parent company's management of the Pacific Finance loan book. A Pacific Finance spokesman said it was believed Octaviar had breached the terms of its management contract, resulting in losses for Pacific Finance.

The spokesman said the legal action would not have any impact on the moratorium, which would continue.

Details of OPI's $446 million worth of loans outlined in the moratorium documents showed vast exposure to the subprime market - contrary to what had earlier been indicated.

The losses on the loan book were such that Pacific Finance investors would get less than half their money back if the Pacific Finance went into receivership.

The documents showed that only 13 per cent of loans had first ranking and the vast majority of the loans were advanced on a loan-to-value ratio of 80 per cent or more.

In addition, vast sums had been channelled through Octaviar, with about $167 million funnelled through a "loan securitisation vehicle".

"The loan book position is disappointing and investors will no doubt be very disappointed with it," Pacific Finance's chief executive Jason Maywald said last month.

At the time he put the state of the loan book down to general economic factors, a downturn in the Australian property market and an issue around the "origination of the loans by Octaviar in Australia".

"Octaviar's a large organisation. They were responsible for the origination and management of the loan book and the financial management of the company. And as a director I received information and reports and asked questions ... and some of the things that I know now today I didn't know in December or even in the beginning of January," he said.

A "creditor update" issued by Octaviar today showed that the beleaguered company now faces claims approaching A$1 billion, meaning its survival must be in huge doubt.

Its only significant remaining asset is a 35 per cent stake in property and travel group Stella, which among other things owns the Gullivers Travel Group in New Zealand.

- More BusinessDay.co.nz stories

Challenger Managed Investments, which holds A$100 million bonds from an Octaviar subsidiary, is also taking legal action to get early repayment of their bonds. A trial is set down for July 21.

The MFS suit alleges a breach of management contract by Octaviar that has led to massive losses. 12,000 Kiwi investors are owed over NZD$310 million.

Octaviar now faces claims approaching A$1 billion, threatening its survival. Octaviar has a 35 per cent stake in Stella, a property and travel group that owns the Gullivers Travel Group in New Zealand.

 

[Brendo73]

Re: Octaviar MFS Premium Income Fund PIF

Hi all, found this thread and thought i better get on, im also a pif investor, i cant do much to help out because im not right up with all this crap that is going on but im here if ya need anything. Thanks to all for trying to get things going so we can get OUR money back. Thanks again,

Brendon.

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Hi All, Here is a media update regarding the PIF. ::ebts of $1 billion may sink OctaviarNick Nichols

25Jun08

EMBATTLED financial services group Octaviar's days appear to be numbered after a raft of new claims lifted the debt it owes creditors to more than $1 billion.

With only $170 million in the bank and remaining assets of little more than $400 million, the Gold Coast company appears destined to be liquidated after conceding it may have to immediately pay Challenger Financial Services $100 million in unlisted bonds not due to mature until 2011.

The trigger for the rush of claims has been winding-up action by the Public Trustee of Queensland earlier this month against Octaviar and a number of its subsidiaries over their failure to repay $351 million in listed notes.


The action is set to be heard in the Supreme Court of Queensland on September 9 and 10.

But before that, on July 21, Octaviar, formerly known as MFS, has to front up to the NSW Supreme Court to defend Challenger's claim.

The company yesterday admitted it would have to roll over in this case.

Until now, Octaviar has consistently denied its sale of 65 per cent of Stella to private equity group CVC Asia Pacific constituted a default trigger for the repayment of the bonds.

But Octaviar company secretary David Anderson, in a statement to the Australian Stock Exchange yesterday, said the Public Trustee's actions 'have triggered an event of default in relation to the unlisted bonds and we have agreed with the bondholders that the bondholders now have the ability to make the bonds due and payable'.

The latest blow has come on the heels of Octaviar's former flagship investment vehicle, the Premium Income Fund (PIF), boosting its claim against the company by $147.5 million.

The claim has been brought by Jenny Hutson's Wellington Capital, which took control of the fund in May. It is on top of an original demand for $50 million in support pledged to the fund by Octaviar.

Ms Hutson yesterday said the latest claim involved loans forwarded from PIF to the then MFS late last year.

"Our determination now is that there is zero value in those loans," said Ms Hutson. "As a consequence there is a $147.5 million loss to be worn by PIF."

Ms Hutson said those loans were 'inappropriate' from PIF's perspective and the fund had retained a top Sydney barrister for PIF investors.

Ms Hutson said it was the 'right time for all and any claims (against Octaviar) to be properly in the ring'.

Ms Hutson said Octaviar indicated it would treat creditors 'in a fair fashion'; she remained opposed to liquidation.

Octaviar yesterday said it continued to talk to its creditors to come to some agreement over payment of its debts.

Among the claims it faces is $56.5 million from the Australian Taxation Office, up from $52.5 million listed in its December 31 accounts. This was due to added interest.

Octaviar's New Zealand subsidiary, OPI Pacific Finance, last week lodged a damages claim seeking $270 million from Octaviar.

The move comes despite a three-year moratorium on the debt struck by Octaviar only last month. National Australia Bank is also owed $40 million through an Octaviar guarantee for funds forwarded to subsidiary Living and Leisure Australia (LLA).

That guarantee is planned to be released once LLA's recapitalisation plan with James Packer's Arctic Capital is completed.

Octaviar chief executive Craig Chapman did not return calls last night

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Another relevant media article::Creditor claims weigh down Octaviar.Page: Print Fiona Cameron | June 25, 2008
OCTAVIAR'S situation has worsened dramatically, with two creditors launching claims against the crippled investment manager for $393 million in damages. If successful, the claims will bring the debt of Octaviar (formerly MFS) to more than $1 billion.

OPI Pacific Finance and the Premium Income Fund are seeking, respectively, $270 million and $147.5 million from Octaviar and a subsidiary.

Jenny Hutson, managing director of Wellington Capital, which in May took control of PIF (formerly an MFS satellite) said investigation of the fund's affairs had shown that in November-December 2007, MFS had drawn down $147.5 million from PIF.

In exchange, PIF had received a series of pre-existing unsecured loans, which now appeared to have "zero chance" of recovery, Ms Hutson said.

The loans accounted for 20c in the dollar of PIF's assets, she said. The actions of the former MFS in drawing the funds from PIF were "outrageous".

The damages claim is on top of $50 million PIF previously claimed to be owed by Octaviar.

The damages claim pits Ms Hutson against Chris Scott, the rebel shareholder who seized control of the Octaviar board in April and is now an executive director.

Ms Hutson was an adviser to Mr Scott during his bid to win a board seat.

New Zealand-based OPI Pacific Finance advised last Thursday of its $270 million damages claim, Octaviar told the ASX yesterday.

In its financial statements to December 2007, released in April, Octaviar reported its $246 obligation to OPI Pacific Finance under a put option.

In a moratorium agreement with OPI creditors, $20 million was paid in March.

Meanwhile, the Public Trustee of Queensland's bid to wind up Octaviar over $349 million in unsecured notes has been put off until September after being moved to the Commercial Causes List of the Queensland Supreme Court.

The matter previously was listed for hearing next month.

This means the first court action facing Octaviar is that of James Packer's Challenger Group over its $100 million in unlisted floating rate bonds.

Challenger Managed Investments is seeking to clarify guarantees Octaviar provided and the terms of the agreement over the bonds. That court hearing has been set down for July 21.

It is understood Challenger executives were surprised to read in Octaviar's notice to the ASX yesterday that the public trustee's wind-up bid had "triggered an event of default in relation to the unlisted bonds".

"We have agreed with the bondholders that the bondholders now have the ability to make the bonds due and payable," Octaviar secretary David Anderson told the ASX.