Wellington Capital PIF/Octaviar (MFS) PIF

Re: Octaviar MFS Premium Income Fund PIF

OCV proposals:

– PIF will accept 22.5c / $1 for its $123.7 million direct and indirect = $27.83M

participation loans with PAC, and assign the participation loans to the

Octaviar Group;

– PIF will accept 15c / $1 for its unsecured PAC notes (being $23.6 = $3.54M

million); and

– PAC will release the Octaviar Group from all other claims including the

damages claim for approximately $270 million;

• PIF: in addition to the above, PIF will:

– accept 22.5c / $1 for its $50 million Support Mechanism claim; = $11.25M

– accept 22.5c / $1 related to the Maximum Yield investment ($30 = $6.75M

million) and assign this asset to the Octaviar Group;

– accept 22.5c / $1 for its further claim of $5.5 million; and = $1.2M *TTL = $50.57M

– release the Octaviar Group and PAC from all claims (including the

litigation claim commenced);

I don't know about anyone else, but I expected more than $50.57 million. I would hold out for extra - it's NOT enough, sorry Chris Scott, most of us are in this for the long term and that needs lots more $M. What else can you offer for the long term??

Re: Octaviar MFS Premium Income Fund PIF

Nobody cares how much you know, until they know how much you care.
Theodore Roosevelt
It is time for JH to show that it is the investors in PIF that comes 1st.

Re: Octaviar MFS Premium Income Fund PIF

Extract OCV ASX announcement under:

The Company will today be forwarding by mail to all holders of the listed notes (ASX code: OCVG) a
proposal to amend the existing terms of issue of those notes. That proposal will require the approval of
the Trustee and 75% or more of the Noteholders by value. Noteholders have been asked to respond by
7pm 11 August 2008. A copy of that proposal is attached to this announcement.
Should the terms of issue of the Notes be amended then Noteholders will need to chose between:
• accepting an immediate cash payment in exchange for their notes
• remaining a Noteholder until June 2011 and enjoying the benefit of security over all available
group assets, or
• a combination of the two
Should a Noteholder accept the cash payment option for all of their notes they will receive $100 for
each of their first 50 notes and $22.50 for any additional notes. Other Noteholders will receive $22.50
for any notes they wish to exchange for the immediate cash consideration. The proposal contemplates
that 200 of the just over 500 Noteholders would receive an immediate cash payment for the full face
value of their notes.
.

Noteholders have been asked to respond by 11 August 2008, that puts added pressure on Jenny to amend her PIF vote deal for us. Trusting she has time to negotiate the best deal possible for the PIF and hopefully include it in the PIF vote deal in August.

Re: Octaviar MFS Premium Income Fund PIF

sak said:

Nobody cares how much you know, until they know how much you care.
Theodore Roosevelt
It is time for JH to show that it is the investors in PIF that comes 1st.

Click to expand...

Sak

This is pure and simple politics.

A classic "Yes Minister"

You do not publish something like this unless you have everything organised and risks assessed.

Is it a deal done already or is JH really going to show us her true capabilities.

Let us hope, that we are fully infomed of progress through the WC website (very quite lately) and through this forum.

Regards


Splitpin

Re: Octaviar MFS Premium Income Fund PIF

Didn't CVC buy 65% of Stella for 400M cash + 900M debt a few months ago? Wouldn't that make the 35% share worth around 650M? Keep in mind this was a fire sale price at the time. Then in recent weeks reports of the 35% Stella stake being worth 400M with OCV having another 170M in cash? In no time at all the stake in Stella lost another 250M somewhere... Now looking at the balance sheet page 18 of the OCV announcement it appears that the 35% stake in Stella is valued at 215M? Another 185M up in smoke and that's if OCV retains it's stake and doesn't liquidate? Would anyone be able to explain this?

To me it looks like OCV is crying poor in an attempt to rid OCV of certain creditors and legal claims against it. Once that's taken care of OCV will have an asset which could be sold in the not too distant future for, say, 650M to the benefit of OCV and any note holders that are willing to hang on, leaving creditors like the PIF out in the cold.

Why should OCV be forgiven any debt or legal claim against it and be allowed to continue as a going concern and possibly reap profits from our loss after its crimes? I pity the OCV shareholders however, these people had access to MFS balance sheets prior to investing whereas we have been outright lied to and stolen from.

Currently the difference between continuation of OCV and liquidation equates to roughly 2c per PIF unit. You are going to need to do a lot better that that! Let us call their bluff and liquidate them to see what Stella is really worth! Plus there's the added benefit of making the world a better place

OR

Why doesn't OCV just admit defeat, carve up their stake in Stella plus their remaining cash and give it to the creditors? At a guess the PIF would get roughly 20% of the 35% stake or 7% of Stella, plus 30M cash which sounds a lot better than 50M to me.

This is a perfect opportunity for JH to demonstrate to us all that JH is not in CS' pocket!

Boots

Re: Octaviar MFS Premium Income Fund PIF

sak said:

Nobody cares how much you know, until they know how much you care.
Theodore Roosevelt
It is time for JH to show that it is the investors in PIF that comes 1st.

Click to expand...

"If you could kick the person in the pants responsible for most of your trouble, you wouldn't sit for a month." - Theodore Roosevelt

"Obedience of the law is demanded; not asked as a favor." - Theodore Roosevelt

My favourite:
"A man who has never gone to school may steal from a freight car; but if he has a university education, he may steal the whole railroad." - Theodore Roosevelt

Re: Octaviar MFS Premium Income Fund PIF

Juan Mortyme said:

"If you could kick the person in the pants responsible for most of your trouble, you wouldn't sit for a month." - Theodore Roosevelt

"Obedience of the law is demanded; not asked as a favor." - Theodore Roosevelt

My favourite:
"A man who has never gone to school may steal from a freight car; but if he has a university education, he may steal the whole railroad." - Theodore Roosevelt

Click to expand...

I guess Michael King went to that university!

Re: Octaviar MFS Premium Income Fund PIF

Coolangatta 9C - 22C. Fine Weather

July 19, 2008 04:59am

Octaviar wind-up case now next weekEmmaline Stigwood

July 19th, 2008

A WINDING-up application against Octaviar and several subsidiaries will be heard next week in Brisbane after concerns about the rate the Gold Coast company was chewing up cash.

Lawyers for the Public Trustee of Queensland yesterday asked the Supreme Court in Brisbane to urgently list the case instead of the planned hearing date in September.

Walter Sofronoff, QC, for the trustee, argued financial statements showed Octaviar (formerly MFS) companies were still spending millions, leaving less and less for creditors.

"The more time that rolls on, the more tens of millions of cash that are being spent," he said.

Mr Sofronoff noted more than $15 million had been spent on external consultants including a 'turnaround specialist' and the Public Trustee was 'not minded to place great faith' in an 'unofficial winding-up scheme' offer sent to creditors on Thursday night and yesterday.

Lawyers for Octaviar argued it needed until September to see if creditors would take up its deal under the unofficial scheme.

Barrister Brian O'Donnell, QC, for Octaviar, said the companies had been operating prudently since January in a bid to stem loses and meet debt-repayment obligations.

However, Justice Richard Chesterman said the company had already sold its major asset, a 65 per cent stake in the Stella tourism group, and expenses seemed to be still eating into the asset base of the company.

He ordered the case be heard on July 24 and 25, with advertisements to be placed in the media today to notify creditors.

Re: Octaviar MFS Premium Income Fund PIF

Octaviar boss says accept deal or he'll liquidate
July 19, 2008

THE chief executive of embattled property group Octaviar has thrown down the gauntlet to creditors owed more than $1 billion by threatening to place the crumbling empire in liquidation if they do not support a payout of 22.5 ¢ in the dollar.

Octaviar boss Chris Scott said the company's creditors, who include noteholders, investors in unlisted managed funds and the Australian Taxation Office, would be better served by allowing Octaviar to trade its way out of its troubles.

"For months and months we have said that the worst option is liquidation, and I've always said that professional investors are rational. Now, this is going to test that theory," he said.

Yesterday Octaviar said it had sent a letter to its 560 noteholders asking them to vote on a payout that would see them either accept an immediate cash payment in exchange for their notes, remain a noteholder until June 2011 and enjoy the benefits of security over available group assets or a combination of the two.

If they accept the cash offer, noteholders will receive $100 for each of their first 50 notes and $22.50 for any additional notes.

The proposal contemplates that 200 of all the noteholders would receive an immediate cash payment for the full face of their notes. Noteholders have been sent a lengthy document and have been asked to respond by August 11.

"This document shows that the worst option is in fact liquidation and we are providing an alternative which is a better option that liquidation," Mr Scott said.

He added that this payment formula also would be offered to all outstanding creditors in a take-it-or-leave it proposal to rescue the company from complete collapse.

"We are going to make this offer to all creditors, not just the noteholders, so that includes the Premium Income Fund … to Pacific Finance in New Zealand, the ATO and to the bondholder, which is Challenger," he said.

He said if successful, the offer could erase $600 million in debt.

"If you don't like either then don't accept the offer and we will go into liquidation … the whole company, the whole of Octaviar will go into receivership … because we roughly owe people $1 billion and only have $400 million with which to pay them," he said.

"I think it's a brilliant offer because if we go into liquidation across the board, the average they (creditors) will get on best analysis is 13.9 ¢ in the dollar."

Re: Octaviar MFS Premium Income Fund PIF

Is anyone able to answer these quetions:

1. Are we sure the $147.5 mil in loans are really worth nothing? OCV are offering to give us 22.5c/$1 in exchange for these loans. What could we sell these assets for now or in a few years?
   
2. If we are equal creditors with Notes holders we should be getting the same offer as them. They are getting between 30c/$1 and 100c/$1. We are getting 15c/$1 up to 22c/$1.
   
3. Can anyone tell me if the claim for $147.5mil is successful in the courts if we would be considered equal creditors (for that money) with the other 4 creditors? And would we have to give back the assets which are supposedly worth nothing?
   
4. Why would they show "Liquidation - All Assets (excluding Stella)" on the table on page 21? Is it an option for them to liquidate and not sell Stella?
   
5. Why is there a big difference in returns for each of the 5 creditor on page 21? I thought we were all equal creditors? It says Notes holders would get 43.3c/$1 but ATO only 17.4c/$1.
   
6. It concerns me that the Note holders already have an offer which they have been asked to accept by Aug 11 and if they do they will be paid by 25th Aug (14 days later). They could be paid out before our deal is negotiated or falls though. Will OCV be allowed to pay out this money to Note holders if PIF doesn’t accept a deal? Surely paying out the Note holders at this rate will leave less money for other creditors (us) if they liquidate.

Thanks in advance,
Dora.

Re: Octaviar MFS Premium Income Fund PIF

DoraNBoots said:

Didn't CVC buy 65% of Stella for 400M cash + 900M debt a few months ago? Wouldn't that make the 35% share worth around 650M? Keep in mind this was a fire sale price at the time. Then in recent weeks reports of the 35% Stella stake being worth 400M with OCV having another 170M in cash? In no time at all the stake in Stella lost another 250M somewhere... Now looking at the balance sheet page 18 of the OCV announcement it appears that the 35% stake in Stella is valued at 215M? Another 185M up in smoke and that's if OCV retains it's stake and doesn't liquidate? Would anyone be able to explain this?

To me it looks like OCV is crying poor in an attempt to rid OCV of certain creditors and legal claims against it. Once that's taken care of OCV will have an asset which could be sold in the not too distant future for, say, 650M to the benefit of OCV and any note holders that are willing to hang on, leaving creditors like the PIF out in the cold.

Why should OCV be forgiven any debt or legal claim against it and be allowed to continue as a going concern and possibly reap profits from our loss after its crimes? I pity the OCV shareholders however, these people had access to MFS balance sheets prior to investing whereas we have been outright lied to and stolen from.

Currently the difference between continuation of OCV and liquidation equates to roughly 2c per PIF unit. You are going to need to do a lot better that that! Let us call their bluff and liquidate them to see what Stella is really worth! Plus there's the added benefit of making the world a better place

OR

Why doesn't OCV just admit defeat, carve up their stake in Stella plus their remaining cash and give it to the creditors? At a guess the PIF would get roughly 20% of the 35% stake or 7% of Stella, plus 30M cash which sounds a lot better than 50M to me.

This is a perfect opportunity for JH to demonstrate to us all that JH is not in CS' pocket!

Boots

Click to expand...

WHO is telling us what Octaviars 35% stake in Stella is really worth? In an MFS ASX announcement in Aug,07 MFS said..."the Stella Group PRESENTLY contributes more than 55% of the company's recurring earnings ...." In a June 23, 2008 .com news report...Stella owns and franchises Austalian hotel brands including Peppers and Saville as well as travel agencies including Harvey World travel and HRG.With a 74% stake in Africa's Protea Hotels, which runs 126 hotels in 13 countries, and 40% of the Golden Tulip chain, the company manages about 49,000 rooms and provided almost half of Octaviars sales last year.." Are the 49,000 rooms still PRESENTLY contributing?(they must produce a nice return!!!) How much of these assets are still there? If, mostly, they are, surely they are worth more than $215 million?

Re: Octaviar MFS Premium Income Fund PIF

"Although it values its 35 per cent of tourism group Stella at $212 million in its books, Octaviar said the stake is forecast to be worth $744 million by 2010, based on independent estimates in February prior to the sale of 65 per cent of Stella to private equity player CVC Asia Pacific." GCB 19/7

"If the creditors reject it, it's off to the knackery," Mr Scott said. Courier Mail 19/7

Re: Octaviar MFS Premium Income Fund PIF

Based on simple analysis (k.smith, Dora) one would suggest that 35% of stella would have to be worth more than 215 mill. Of course OCV is going to talk down its value

JH is also quoting 215 mill - is this simply because this is what she has been TOLD it is worth. If she is a shrewd business woman then she should be able to determine roughly what it is worth and base her decision on wether to accept OCV 22.5 cents/$ on this or be ruthless and go for the throat.

The flip side is $50 mill to the PIF now would make a big difference and we could put that money to good to use + fighting in the courts may take a long time to recover anything and will be costly and liquidation of OCV may result in less $$$

DILEMMA!!!!!!!

Re: Octaviar MFS Premium Income Fund PIF

i think the best course for PIF to steer is take the $50 mill now and if the Octavier assets appreciate over time - (and have some real confidence in the partner Octavier have in that deal CVC )- they are the best in the business at this type of transaction - liquidation of Octavier means the upside potential is gone - JH has to work hard to get PIF cut into an ongoing interest in the success of that asset - if that can happen then there is hope for a better than $50 mill return on your funds - take what is tangible / liquid and at risk off the table now - keep the blue sky in Octavier - but get some sort of participation in the upside of the remaining assets in Octavier - they can't just wipe their hands and walk away - thats too easy - JH has to earn her money now - if she is serious about growing her 45c into a buck - this is an option to get started now - the alternative - is less cash now and no potential upside in Octavier assets.

Plus no further money needs to be sunk into Octavier to keep it going as far as PIF is concerned

Please dont think im pushing the just accept it wagon - we need to be pragmatic here - get our cash off the table thats there now - but get upside participation in remaining octavier assets.

Re: Octaviar MFS Premium Income Fund PIF

Deano1...I don't believe that liquidating Octaviar or the PIF is in our best interests, but accepting 15-22.5 cents isn't good enough. I would much rather negotiate an ongoing share in the returns on 1/3 of 49,000 hotel rooms!!!!!!!!!

Re: Octaviar MFS Premium Income Fund PIF

my point is why not both - get your $50 mill off the table and get a share in the upside as well - that can only come thru negotiation with octavier - they have literally admitted that something wrong has occurred in being prepared to make the offers they have already - instead of being exposed to current risk of $233 mill - get that down to $182 mill by taking the $50 mill on offer - but as they have admitted they have done something wrong - screw them down to see if over the next 3-5 years theres not another say $90 mill dividend to come out of the realisation of the residual Octavier assets - i dont think your going to get too much of a better deal than whats on the table at the moment - no one else in the space really is going to be too interested in taking a 35% stake in Stella and being a minority - other than CVC and if CVC can get 100% control of that asset for next to nothing - liquidation will play into their hands - best outcome is PIF holders have some entitlement without and capital committment to the residual Octavier assets then you could be looking at better than 60c in the dollar or more.

Re: Octaviar MFS Premium Income Fund PIF

Totally agree with Deano, no sense in liquidation of OCV or PIF in this environment..I mean if the market was good, OCV, Centro, Babcock, Allco would not be in the mess they are in now. It's suicide to sell anything, you are just making the fat cats, fatter.

What JH has to do is stand up for us and show us she IS in it for US, and if she can take the $50m that's offered now AND get us a stake of Stella when it starts churning out the profits..then she goes a hell of a long way in capturing that 75% unit vote next month.

We just can't keep taking hair cuts with no chance to recoup down the track when things start getting rosey again. She keeps saying have faith in her, I will turn your 45c back to $1 and beyond. Well here is your chance to shine Jenny and show us that you are the one to back for the next 3-5 years. By the end of this month the bank is paid off right? So that excuse is gone. If not then it is all BS and quotes from a dead president.

MFS has taken sooo much from us already, it's about time that someone like JH makes them pay it back and not just scraps, we want a lion's share that is owed to us down the track. If WC can't do that for us now, what hope have we got when this door closes..money doesn't just come by blind faith and speeches alone!!

Re: Octaviar MFS Premium Income Fund PIF

seamisty said:

Coolangatta 9C - 22C. Fine Weather

July 19, 2008 04:59am

Octaviar wind-up case now next weekEmmaline Stigwood

July 19th, 2008

A WINDING-up application against Octaviar and several subsidiaries will be heard next week in Brisbane after concerns about the rate the Gold Coast company was chewing up cash.

Lawyers for the Public Trustee of Queensland yesterday asked the Supreme Court in Brisbane to urgently list the case instead of the planned hearing date in September.

Walter Sofronoff, QC, for the trustee, argued financial statements showed Octaviar (formerly MFS) companies were still spending millions, leaving less and less for creditors.

"The more time that rolls on, the more tens of millions of cash that are being spent," he said.

Mr Sofronoff noted more than $15 million had been spent on external consultants including a 'turnaround specialist' and the Public Trustee was 'not minded to place great faith' in an 'unofficial winding-up scheme' offer sent to creditors on Thursday night and yesterday.

Lawyers for Octaviar argued it needed until September to see if creditors would take up its deal under the unofficial scheme.

Barrister Brian O'Donnell, QC, for Octaviar, said the companies had been operating prudently since January in a bid to stem loses and meet debt-repayment obligations.

However, Justice Richard Chesterman said the company had already sold its major asset, a 65 per cent stake in the Stella tourism group, and expenses seemed to be still eating into the asset base of the company.

He ordered the case be heard on July 24 and 25, with advertisements to be placed in the media today to notify creditors.

Click to expand...

So where does this leave the OCV proposal if the PTQ step in and say ok, thats it folks, all over. Or can OCV secure an undertaking from its 5 major creditors to the effect that thay are willing to take the deal in principle prior to next weeks meeting so that they can present it and ask for more time? This is too complicated for me! Does JH need approval from PIF investors or can she accept the deal on behalf of the RE? If OCV are not ordered to liquidate I agree with what deano1 and Javiar are saying. Seamisty

Re: Octaviar MFS Premium Income Fund PIF

Javiar, it seems to me that we are being confined by the imminent closing of doors from a number of directions, it all seems to hinge around the magic month of August, and %?$?and Millions are bandied about in an almost haphazard fashion.Can anybody tell us how Stella is performing at the moment? If they were contributing the major amount to Octaviars profits, how different is this scenario now? Perhaps there is still a lot more $ being earnt there that we dont know about.....do we get a better insight when they release their yearly report....in September!!!!!!!!!

Re: Octaviar MFS Premium Income Fund PIF

k.smith said:

......Can anybody tell us how Stella is performing at the moment?.....

Click to expand...

Excerpt from yesterday's Creditor Update from OCV announced to the ASX:
"The Stella Group has been reported in the press to be presently performing behind its earnings forecast" (p.19)