Wellington Capital PIF/Octaviar (MFS) PIF

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

I'm not an accountant. Obviously by having placed a considerable sum of my capital into PIF, I'm a also bit dumb. However, my gut feeling as an AG member is that the posts are becoming very emotional. We need to step back a little and think this through objectively. If investors want to get out at 14 cents, is there any way they could do so without the NXS? Unless you are on your death bed, 14 cents in the dollar won't last very long. It's a ludicrous price, but backed by experts, so it has to be accepted.

Also, it's hard to disagree with the proposition that JH is taking a big risk with her business reputation. A PIF fiasco would do untold damage to her business reputation. Let's calm down and get to work forming a committee. Otherwise it's just words typed into the biosphere...lost in space.

 

[Ivor Watt]

Re: Octaviar MFS Premium Income Fund PIF

Continued
Undertaking to drop in value from carry value to realisable value in each of the asset classes shown on handout

LLA & Arctic, I understand that the offer consists of 10m cash, 30m LLA shares and balance who knows, I may not have got these figures correct, if any one has others please let me know.
Centrelink valuation purposes 45c NAV
No decision on NSX until after August meeting determines future direction of fund, IE liquidation or continuation.
WC will consider buy/sell within the fund members as an alternative for members in hardship.
JH open to AG member on the board
Mentioned lump sum payments further down the track as payment of capital as money came in while she was simultaneously to grow unit value.
This is the remainder of the original post, hope it is helpful.

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

some notes from Gold Coast meeting
Tax dept claim does not take precedence, unsecured like the others.
Will consider buy/sell within the fund as alternative to NSX.
Mentioned further lump sum payments down the track as payment of capital as money came into the fund while simultaneously working to grow unit value.
WC fees will be based on 45c valuation.lots more but lost it on this post, will top up on another post

Well that tends to contradict that no redeeming of our investor funds will take place except through the NSX. Is Jenny saying here, if you don't want to redeem via the NSX, I will try and give you back "further lump sum payments down the track" as payment of capital as money (part redemptions)? OR is she saying that this will simply be a distribution capitalised for tax, because of PIF losses?

 

[kogo]

Re: Octaviar MFS Premium Income Fund PIF

I'm not an accountant. Obviously by having placed a considerable sum of my capital into PIF, I'm a also bit dumb. However, my gut feeling as an AG member is that the posts are becoming very emotional. We need to step back a little and think this through objectively. If investors want to get out at 14 cents, is there any way they could do so without the NXS? Unless you are on your death bed, 14 cents in the dollar won't last very long. It's a ludicrous price, but backed by experts, so it has to be accepted.

Also, it's hard to disagree with the proposition that JH is taking a big risk with her business reputation. A PIF fiasco would do untold damage to her business reputation. Let's calm down and get to work forming a committee. Otherwise it's just words typed into the biosphere...lost in space.

Well said. I'm of the same opinion. I think some of the posts are getting way ahead of themselves.

 

[Ivor Watt]

Re: Octaviar MFS Premium Income Fund PIF

For everyones interest, WC sold 32 apartments yesterday in Sylvania, Sydney for $25m, exposure for PIF $30m, article in AFR today.

 

[SPLITPIN]

Re: Octaviar MFS Premium Income Fund PIF

May I quote from the bottom of the first page of the handout today under Industry Leader..... My aim is to;........."offer unitholders a choice about whether they will remain unitholders by listing the Fund on the NRX."

Anyhow we need to sort this one out slowly and in definitive detail with JH so we clearly understand how this ties in with todays statements that there will be no redemption system in a new constitution proposed for an ongoing scheme.

A response on this issue from the next forum meetings would be most appreciated.

I am sure our forum is "all good".

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Thanks to all who are contributing, I know there are many who don't post but follow the forum and find it a useful tool for keeping informed on the PIF. As has been said there is quite a few key issues that investors are still finding confusing. Once WC has finished with the forums JH will know the main concerns investors have regarding the future direction of their funds. At least there will be an income stream resumed (albeit a tad smaller than previous distributions) and the centrelink issue addressed, so hopefully this will negate the need for investors to have to cash out in the event the fund is listed.Perhaps if WC get a vote of confidence that the majority will be prepared to stay with the Fund for a minimum of 2 years with a lesser distribution and part re payment of capital there would be no need to list at all. I read on a daily basis of other similar type investments that are in much worse shape. I am an investor and have been invested in this fund since it started. I also invest in many other fields. They all have cycles.Even without the mismanagement prior to Chris Scott coming on board at OCV, this fund would have been facing tough times but to a much lesser degree. The damage has been done but it's impact can be reduced with good management and the sensible attitudes of investors. I am prepared to give JH a go, I think the woman is well respected and has good credentials. If she can turn this debarcle around I'll stick with WC long term. Seamisty

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

Seamisty - You're offering some solutions in a very calm way. That's what we need to have in abundance - calm. As has been pointed out, $25-$30m was very recently gained from the Sylvania unit block. I remember the recently departed Mr Hutchings earlier this year wanting $4.5m from MFS. $25m is six times that amount.

 

[Mutchy]

Re: Octaviar MFS Premium Income Fund PIF

Well that tends to contradict that no redeeming of our investor funds will take place except through the NSX. Is Jenny saying here, if you don't want to redeem via the NSX, I will try and give you back "further lump sum payments down the track" as payment of capital as money (part redemptions)? OR is she saying that this will simply be a distribution capitalised for tax, because of PIF losses?

Hi Breaker1.
In the Sydney meeting, in answer to a question concerning what I think are the dates of maturity of investments, someone having two investments due for renewal at different times but wanting to redeem their investment sums simultaneously, Jenny said that the process for redemptions would be the subject of further thought and that a proposal would be put to the August meeting. She had previously said that she had already made some redemptions in the case of extreme hardship and in those cases recognised the need for discretionary WC redemptions.
She took into consideration another investors (Dora?) proposal for a win - win system of a WC facilitated off - market sell and buy scheme and said that she would consider this scheme of trading also and make a proposal at the August meeting.
With respect to the nature of the initial 3 cents payment you are correct in that it will be a distribution capitalised for tax. She went into an explanation of the three concepts necessary to understand the nature of the 3 cents distribution. Please see my (perhaps poor) explanation in post #845 on page 45.
There are many things which are unclear at present because she has made promises to reconsider many of the original pre-meetings WC propositions like NSX listing (where she said clearly in Sydney that the listing on 21st July would not occur) and I think we should not be drawing conclusions at present but asking those who are going to the Newcastle and Port Macquarie meetings to seek clarification.
The issues which need clarification can be gleaned from the previous three pages of posts. They are the matters where obvious confusion exists.
I hope someone can take up our cause at these next two meetings and get clarification.
Mutchy

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

The following is an excerpt from today's Gold Coast Bulletin, it is conflicting to some other figures being bandied around regarding LLA's debt to the PIF and needs clarifying::::An additional mezzanine finance facility totalling $71 million has also been put into place, replacing most of the $63 million owed to the Premium Income Fund, formerly controlled by MFS, which is now known as Octaviar.

The fund will be repaid $53 million from the new mezzanine funding facility and a further $8 million will be retained by LLA to form another plank in its mezzanine finance facility.

The $8 million will be repayable in six years.

The deal appears to have discounted the amount owed to the $770 million Premium Income Fund which froze redemptions to investors earlier this year for 360 days.

Cheers, Seamisty

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

Media article from GCB:::Angry locals want action over MFS fund:::Shannon Willoughby

11Jul08

EVERY individual had a different story and had invested a different amount for a different reason.

But they all wanted to know one thing: where was their money and when and how would they get it back.

More than 600 investors yesterday flocked to the Gold Coast Convention and Exhibition Centre to hear what their options were and where they stood.

In the firing line was the calming Jenny Hutson, head of Wellington Capital, the company which, for the time being, has assumed control of the impoverished MFS Premium Income Fund.

For more than three hours she fielded questions from concerned investors, mostly retirees, many of whom were still putting money into the fund as late as January this year.

One man said his redemption was due two days before the fund was frozen.

"I invested $100,000 and the only thing I have got in return from MFS is a cap," said another angry lady.

Unintentionally, the statement was an icebreaker and was met with laughter from the floor. Later on, another investor asked where his cap was.

Most of the crowd agreed on one thing: Jenny Hutson is their only hope in making an improved return on their lost funds.

"I think she's (Ms Hutson) proposing the best idea," said Margaret Kaddatz, of Burleigh Heads.

Friend Neveda Sommervelle agreed: "Having spent the best part of life raising a family, you look forward to retirement. It was a hit in the guts (losing the money)."

Another man, in his mid-40s, said his money was invested for his son's education.

"I just feel sorry for all the pensioners. They have been defrauded and the Government should step in," he said.

Ron Haggart, acting chairman of the Gold Coast PIF Forum action group and who has more than $1 million in the fund, said tragic stories had arisen from the fund's demise.

Leonard Krawczyk said he wanted retribution.

"There should be people in jail," he said.

Varsity Lakes couple Sid and Jenny Waugh, who have a 'significant amount' invested, said they 'felt confident' with Ms Hutson's proposal.

But for some, all was still lost. One man is understood to have lost more than $4 million in the fund. He has since had to go back to work.

Dennis Chapman, who on Monday featured in The Bulletin after attending the first meeting in Brisbane, went to the Gold Coast meeting.

Mr Chapman had more than $1.2 million invested the fund and now cannot afford to fill his car with fuel.

"It was the same as the last one. It will be so long before we may see any money and by then I might not be here, many of us might not," he said.

"If I died tomorrow, I don't know how they would afford to bury me."

 

[akernst]

Re: Octaviar MFS Premium Income Fund PIF

I attended yesterday's meeting on the Gold Coast and looks like the PIF would have been in a down turn this year no matter who were managing it.

I hope Wellington get the vote to continue on the next 3 years. I certainly trust a woman more than a man and she is local. There will be another upward
cycle in the property market coming up and so we should let Wellington get on with the job, as long as she communicates with us, every set of the way.

This is my final posting on this forum, as I have noticed vultures already circling on this forum, thinking if we liquidate, they will get some bargains, and
later make a fortune in the upswing.

I would advise to close this forum, as it has now been compromised badly.

 

[Jadel]

Re: Octaviar MFS Premium Income Fund PIF

I do not know who you are or what your agenda is but i have never seen anybody post on this forum who has expressed an opinion in favour of liquidating the Fund

And believe me I have read every post

Liquidation would be a disaster

THIS FORUM IS ABOUT ALTERNATIVES MATE

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

I attended yesterday's meeting on the Gold Coast and looks like the PIF would have been in a down turn this year no matter who were managing it.

I hope Wellington get the vote to continue on the next 3 years. I certainly trust a woman more than a man and she is local. There will be another upward
cycle in the property market coming up and so we should let Wellington get on with the job, as long as she communicates with us, every set of the way.

This is my final posting on this forum, as I have noticed vultures already circling on this forum, thinking if we liquidate, they will get some bargains, and
later make a fortune in the upswing.

I would advise to close this forum, as it has now been compromised badly.

Don't be put off by a couple of negative posts Akernst,the forum is still a very useful tool for information, sharing of ideas, venting frustration, moral support etc. All public forums are at risk of attracting vultures and cuckoo's but they are usually recognised and are far outnumbered by the genuine posters. I very much doubt the PIF will be liquidated and Jenny Hutson can get on with the job of realising as much value as possible for unit holders. It has been a very stressfull, frustrating saga for all involved. I am extremely dissalutioned by the lack of intervention of the Powers that be, ie ASIC in regard to what has happened. They have proved to be grossly inadequate to date in dealing with this situation. You have contributed some good posts, we need people like you on board. seamisty

 

[SPLITPIN]

Re: Octaviar MFS Premium Income Fund PIF

Another article from GCB

Shannon Willoughby

11Jul08

JENNY Hutson, the woman at the helm of the impoverished MFS Premium Income Fund, has not ruled out pursuing legal action against former directors Michael King and Phil Adams.

Ms Hutson, who has taken control of the fund through her vehicle Wellington Capital, yesterday told more than 600 investors she would take the 'appropriate course of action' to try to recoup money she claims is owed to the fund by Octaviar (formerly MFS).

Ms Hutson is on a week-and-a-half long tour, addressing investors of the fund, once the flagship fund of MFS, on their options for recovering their money.

The 40-year-old said investors, mainly retirees, had the choice to liquidate the fund, in which she believes will deliver a 14c return, or stick with Wellington Capital as it works to recover between 45c to 65c per unit.

The group will vote next month and, for Wellington to remain at the helm, approval of 75 per cent of the 770 million units is needed.

Ms Hutson, the 2007 Business Woman of the Year who founded Wellington Capital three years ago, took control of the fund in May.

Since then, she has reduced the PIF bank debt from $100 million to $55 million and hopes to have the remainder paid by the end of the month.

She has also instigated legal action against MFS and MFS administration for $147.5 million in loans the group forwarded last year against property assets, among them the Sheraton Mirage at Port Douglas.

Many of the investors who attended yesterday's meeting at the Gold Coast Convention and Exhibition Centre demanded to know why Mr King and Mr Adams -- former directors of MFS who resigned earlier this year -- had not been held liable for the fund's demise.

"At this stage I have only taken action again MFS and MFS administration. I wanted to see if ASIC (the Australian Securities and Investments Commission) was dealing with it in a different way. (We will take the) appropriate course of action if things unfold," she said.

She said her lawyers had told Wellington Capital the prospects of success were 'high'.

The majority of investors have conceded Ms Hutson's proposal was the only way forward.

Part of the proposal outlined to investors was a promise to deliver 3c in distributions by December and 6c the year after.

Ms Hutson also has applied to list PIF on the National Securities Exchange, allowing investors who needed to bail out the option to sell.

Yesterday's meeting, the last one for this week, attracted the largest number of investors, coming from Ballina to Hervey Bay.

For more than three hours, the embittered crowd fired questions at Ms Hutson over the future of PIF and demanded to know how they came to lose their earnings.

One man, who has 17 different investments in Octaviar, wanted to know why the fund accepted money from him after it knew it was heading downhill.

He said the fund took $45,000 on January 30, two days after it froze its redemptions.

"To me, that was fraud," he said.

"What chance have I got in making a claim when they knew (the money) was gone."

It is understood the investor was not alone, with money from several others being accepted into the fund immediately after it froze redemptions.

Others were frustrated with Centrelink and the Department of Veteran Affairs, which see the fund as asset rich and refuse to pay pensions.

Ms Hutson said she had written to both the bodies explaining the situation and would have her staff follow it up.

 

[RickH]

Re: Octaviar MFS Premium Income Fund PIF

This is only my assumption after JH stated several times the redemption system was to go.

JH indicated a vision of NSX then maybe to ASX.

If the fund is to go on indefinately (as per JH vision) with no remption scheme in place, how does an investor withdraw in time from the scheme.

A good question for the next forum.

The 3 cents are distributions and JH stated could be capital or earnings or combination and she would clarify further.

Hi Splitpin,
SELL:
Hopefully, when WPIF is listed on the NSX a person could sell their units/shares on this exchange. The 2.5% brokerage is high but it would be a once off cost. People who need capital and own Commonwealth Bank Shares must sell them on the ASX and pay a smaller brokerage fee. But it is really the same situation.

Then further down the track we wishfully pray that the fund is listed on the ASX after becoming a great and successful listed managed fund with a base cost of say 0.7% and life will be back to normal.

ANOTHER CONSIDERATION FROM LEFT FIELD – UNITS/SHARES USED AS SECURITY FOR LOANS.
If the fund is truly valued at 14 cents then some investors may consider using their units/shares as the security for a loan and plan on the future valuation rising to 45 cents and more within two years.
This loan could be based on say 50% of the NTA.

Regards,
Rick.
PS: I still believe that we should follow JH if her presentation and planning sounds reasonable and list onto the NSX.

 

[RickH]

Re: Octaviar MFS Premium Income Fund PIF

Blah Blah - If i have to go through the NSX it's not worth a pinch of ****!



Whats the good of we investors getting piddling payments over 5 years, with inflation eating away our monies, if the only way we can redeem our lump sum investment, whether 45c/65c or even the magical $1, is via the NSX, only to find 6 months down the track that an NSX redemption is ONLY worth 5c-15c a unit.

Surely the feedback from the Gold Coast about this must be an error. Jenny told me that we would see distributions and our own invested capital returned (in part), hopefully quarterly, over 3-5 years, as returned PIF monies came in and that it would partially follow the DOH model, which is exactly that, part investor capital paid back, quarterly, as monies are received by the DOH fund. If not, I must have heard her wrong, but I did verify it with her - unless Jenny misunderstood me. At the time, she did not state or know what our unit value was as we spoke.

Hi Breaker1,
You are being way too negative. Obviously we disagree with what should happen. PIF has changed from being an Insured First Mortgage Income into current mess/Diversified lack of Premium Income Fund.
If it was a football match and your team was behind at half time we would all hope that our coach would present confident strategies designed to improve our performance with a potential goal of actually winning the game. At this point in time is up to the players to join together as a team and follow the instructions of their coach.
IF WE BELIEVE THAT JH IS THE PERSON TO LEAD US THROUGH THIS SITUATION - THEN WE MUST LET HER DO IT HER WAY. IF WE FORCE HER TO COMPROMISE ON HER PLANNING SHE CANNOT BE EXPECTED TO ACHIEVE HER GOALS OF 3 cents by Xmas, 6 cents per annum and maybe $1.00 value within 3-5 years. This would be the ultimate results. Give it a try, If her presentation is realistic.
Regards,
Rick.
PS: Yes, PIF is complete disaster at this point in time but we just cannot rollover and die.

 

[deano1]

Re: Octaviar MFS Premium Income Fund PIF

disappointed in the comment that she will wait to see how things unfold, with respect to the former directors etc - if she wants to be really taken seriously by the business community she needs to show she is uncompromising when it comes to pursuing the thieves - if she took legal action against all the former directors and chairman of MFS / Octavier - she is 1 - sending a message to everyone - dont mess with me i will sort you out - 2 - i think her ability to negotiate better value from the assets is enhanced by this action.

I know she is busy selling her plan - but as i said yesterday - she needs to get the heavy lifting started and fire a couple of shots at the thieves - if she takes the lead - ASIC and APRA the car accident spectators will be forced to pull their fingers out and start kicking some heads.

 

[RickH]

Re: Octaviar MFS Premium Income Fund PIF

I'm not an accountant. Obviously by having placed a considerable sum of my capital into PIF, I'm a also bit dumb. However, my gut feeling as an AG member is that the posts are becoming very emotional. We need to step back a little and think this through objectively. If investors want to get out at 14 cents, is there any way they could do so without the NXS? Unless you are on your death bed, 14 cents in the dollar won't last very long. It's a ludicrous price, but backed by experts, so it has to be accepted.

Also, it's hard to disagree with the proposition that JH is taking a big risk with her business reputation. A PIF fiasco would do untold damage to her business reputation. Let's calm down and get to work forming a committee. Otherwise it's just words typed into the biosphere...lost in space.

Hi selciper,
Your thoughts are realistic. We are all a bit dumb but that is why we all need to listen and learn. We must try to take the emotion out of our decision making process.
I agree 14 cents is way too low a price to sell out of PIF.

If we are all good samaratins and decided to help those who really need immediate cash flow help and not those that just want their money back - what can we do?

I know that we cannot pay them $1.00 for all of their units because that means the remaining unit holders actually lose more money.

The current value is 14 cents if the assets are sold off in a liquidation sale and the two year conservative value is say 45 cents.

WHAT ARE THE OPTIONS:
Yes, We should still consider listing on the NSX and then we may be able to organise loans using the units/shares as security.
Basically we could say that we are expecting 200% NTA return based on the current 14 cents to 45 cents within two years.
WIN/WIN SITUATION:
Subject to the amounts involved - How about a loan advanced by PIF based on say 15% interest. It has to be a realistic interest return to be capable of helping the fund achieve its objectives.
The destitute unit holder gets immediate cash flow on the drip feed system, while still holding but not controlling the unit/shares and when the value returns to say 45 cents PIF could sell part of their units to recover the interest costs.
PIF would be secured by a charge over the units/shares.
Regards,
Rick.

 

[RickH]

Re: Octaviar MFS Premium Income Fund PIF

Hi Rick H,

I was only trying to clarify for others that the payment we hope to receive from October and beyond may be noted in paperwork as a capital return ( for the purposes of minimising tax on earnings and may also benefit the fund moving forward based on accounting principles) but it will stillmost likely still be from the earnings created within the fund.

She cannot be expected to payout a physical capital repayment from the sale of assets that at present may not be able to besold in this current economic climate as the property market in general is being "slaughtered" with investors seeing the value of good quality listed funds such as GPT and others reduced by 45% or more. Especially if she is suggesting she hopes to grow our current unit value over time back to the $1.

Just trying to provide some explanation of terms for those that dont fully understand, remember there is still a number of meetings to yet be held and then we will get more detailed information on all questions and answers from these meetings and then we may also hopefully get the other detailed information we requested about the actual assets of the fund and so forth. then we can make a more informed decision. including this proposed NSX listing, how it may impact on those in the fund and what it may provide to those wanting to exit the fund now or later.

Hi goldfinger38,
Thank you.
Your comments are always reasonable.
Regards,
Rick.