Wellington Capital PIF/Octaviar (MFS) PIF

[Mary Lynch]

Re: Octaviar MFS Premium Income Fund PIF

When I called in November to ask for the redemption form to fill out for funds due 2 days after the freeze (we were about to buy a house)I was offered a bonus if I stayed on!

 

[dantra]

Re: Octaviar MFS Premium Income Fund PIF

hi, im not sure whether or not this could apply to us but i have kept it just incase. it was posted in the herald sun on june 3rd.
ps. i hope it works.

 

[PIFholder]

Re: Octaviar MFS Premium Income Fund PIF

My adviser just sent me this ...
EGM is 18 September



Investor Update: 1 August 2008
Unitholder meeting


Jenny Hutson, Chairperson of Wellington Investment Management Limited, the responsible entity for the Premium Income Fund is pleased to advise that the unitholder meeting to consider proposed changes to the operation of the Premium Income Fund will be held:

Date: 18 September 2008
Time: 10.00am
Place: Gold Coast Convention and Exhibition Centre, Cnr T.E. Peters Drive and Gold Coast Highway, Broadbeach

Meeting material will be forwarded to all unitholders by mid-August, and will be available for download from our website www.newpif.com.au.

It is important that each unitholder votes, either by proxy or in person, to ensure that each investor has a say in the future of your investment in the Premium Income Fund.

Debt arrangements

The Premium Income Fund has undertaken debt repayments in the month of July which have seen the debt position of the Premium Income Fund reduce from $55 million at the end of June to $20 million as at 31 July 2008. The remaining $20 million has been refinanced and will be repaid from asset realisations and borrowers from the Premium Income Fund refinancing over the next 90 days.

The new arrangements provide flexibility for the Premium Income Fund and it is the view of the board of Wellington Investment Management Limited that the refinance was consequently the optimal outcome for unitholders.

Offer from Octaviar Limited

Octaviar Limited has made an offer to each of its five creditors.

The board of Wellington Investment Management Limited has received an offer from Octaviar Limited in similar terms to the other creditors and is currently considering the proposal. The board remains in discussions with Octaviar Limited and its advisers in relation to an outcome.

The offer is for 22.5 cents per $1.00 outstanding or a secured debt position with the Octaviar Limited, with the debt to be repaid in 3 years from the proceeds of the sale of Octaviar Limited’s 33.3% ownership in the Stella travel business. The value of the debt alternative is almost entirely dependent on the value of the Stella travel business in 3 years and is therefore difficult to determine.

Octaviar Limited’s offer to the Premium Income Fund is also dependent upon all other creditors of Octaviar Limited agreeing to compromise what is currently due to them. If for example, only 4 of the 5 creditors owed money by Octaviar Limited reached agreement the offer to the Premium Income Fund could not proceed.

Octaviar Limited has clearly indicated that if agreement is not reached, Octaviar Limited will be wound up. This alternative is not economically desirable from the Premium Income Fund’s perspective as on a winding up it is estimated that the return to the Premium Income Fund would be 11.8 cents per $1.00 outstanding. The timing of the payments would also be very uncertain.

Wellington Investment Management joined all of the other creditors in the Supreme Court of Queensland on Thursday 24 July 2008 opposing the application to wind up Octaviar Limited. The application for winding up of Octaviar Limited has now been adjourned to 8 and 9 September 2008.

Full documentation in relation to the offer from Octaviar Limited is now available on Premium Income Fund website www.newpif.com.au.

If investors have any questions in relation to the Octaviar Limited offer or the upcoming Unitholder meeting, please contact the Wellington Hotline on 1300 854 885 or investorrelations@newpif.com.au.

 

[Duped]

Re: Octaviar MFS Premium Income Fund PIF

Custodian: PDS Page 37 "has no independent discretion with respect to holding assets". Technically JH is likely correct that Perpetual was diligent. But this doesn't mean that Perpetual didn't overcharge for this substantially administrative service or that Advisors or even MFSIM/MFS Ltd over sold Perpetual's role. Question is: did Perpetual know its role was being oversold AND then did nothing about it?

I find it strange that WC don’t blame the illiquid state of the fund at least partly on this activity. (they just mentioned the rush on redemptions which would have only been those that were due to redeem that month)

I agree. It's concerning. Unfortunately I'll have to agree with CS in that legal actions are expensive and consume resources. You have to balance the cost against the returns+the likelihood of success. One thing I trumpet is that our court system on the whole doesn't dispense justice, it dispenses the law. I'm not happy about it but, there it is. It's beyond the scope of what can help PIF. And JH should have a better feel than me for which battles would be best to fight. One thing is for sure, insurance companies IMO are more like law firms in disguise, they have a formidable force of lawyers. While JH may be an awesome lawyer, she'd be coming up against specialised peers and deep pockets. They'd certainly be no Denis Denutos to be seen.

At the Bris forum JH appeared to be saying we'll get better returns from engaging the current investment market than if she allocates those same resources to fighting legal battles. Without having seen any of the facts I have to tend to agree. I'd rather she make money than dispense justice. Hence the question I'm constantly asking myself is, do I trust WC enough. (Since Jan 08 my BS-ometer has been on max sensitivity)

Technically JH is correct about the demise of PIF being due to illiquidity. And from my spiel above, I can see why she's saying it. This reason for PIF's freeze doesn't change the road forward.

But it's like saying that cause of death is 'lack of oxygen to the brain'. Doesn't tell us anything. Almost every injury/ailment eventually causes lack of oxygen to the brain and hence death of the brain.

IMO MFSIM's abuse of PIF turned it into a morbidly obese, binge drinking, chain smoking, junk food binger. With such risky behaviour it was only a matter of time before heart failure i.e. illiquidity. This over blamed 'credit squeeze' was just the trigger, akin to making the binger walk the stairs rather than taking the elevator. If PIF was in good shape it would have climbed the stairs, slower than the elevator, but within its capability when stretched. MFSIM were morons to think the elevator would never fail. Duh. And I was a moron to believe that 2% above a bank deposite rate was sustainable by a newby.

Don't forget that sometime between 30 June 2007 and Jan 2008, MFS Management Pty Ltd redeemed SIXTY MILLION units. This represents about 7.5% being whipped out of the fund. What did this do to the fund's liquidity?

But this doesn't change WC's plan for the road ahead.

No mention of public Indemnity for the people that handed over the money. Does anyone know the implications of suing the former directors of the current RE? Is PI attached to an individual or a company?

Good question. Don't know. Shouldn't be difficult to answer. Any of you posters have your own PI insurance? Can you ask the issuer? But even if it does attach to individuals, WC holds all the evidence and would have to allocate resources during a case, particularly during the 'discovery' phase of a case. Sucks. I'm not decided on the PI issue.

Is the comment on Lloyds saying we can only claim a max of $3mill (total) from Lloyds for any relevant matters?

I vaguely recall , each loan/investment (i.e. matter) is really covered by separate policy. MFSIM could pick and choose which 'matters' to cover; up to a max of $3M. Years ago I pulled up my financial advisor for his spruiking of this "feature" of the fund because I calculated the max cover to be merely around $20M; for a $600M+ fund. Pittance.

Bit if a thesis but hope this info helps. Cheers

 

[Javier]

Re: Octaviar MFS Premium Income Fund PIF

Well if sanity prevails and OCV is not wound up upon all 5 creditors agreeing, I would think JH will take the wait 3 year option and get hopefully all the $220.5m that we are claiming.

If the market picks up, and Stella is worth a bundle like it should then our fund should look closer to that 70c/$ and hopefully her 5 year full return will be a reality.

We REALLY need for all to vote for WH on Sep 18 to get the 75% vote..and think some money returned the next month after that.

I see this as some positive news for a change..fingers crossed!!

 

[PIFholder]

Re: Octaviar MFS Premium Income Fund PIF

I must agree Javier. Voting for JH in the current situation is IMO the best way forward ... and I really need my distribution in October!

We REALLY need for all to vote for WH on Sep 18 to get the 75% vote..and think some money returned the next month after that.

I see this as some positive news for a change..fingers crossed!!

 

[Bumblebee]

Re: Octaviar MFS Premium Income Fund PIF

I have been plodding through the "Creditor Offer Document" now available on the Wellington website.
It says under "Liquidation Senario" for OCV on page 20 that PIF will get 11.8 cents in the dollar without Stella.
My understanding is that OCV cant liquidate without selling Stella, (surely that's right).
...and would'nt that give PIF a better "liqidation" payout from OCV than we have been told to date??
I am getting befudled with all this......anyone help?

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

.... I would think JH will take the wait 3 year option and get hopefully all the $220.5m that we are claiming.
...

The secured debt agreement alternative is pretty vague (section 4 of the TermSheet). Anyone know what the dollar amount might be? The document this section refers to doesn’t really help much dose it?

I don't like how it's one or the other for each claim. I would like to take the 15 or 22 cents in the dollar now and the rest as it becomes available. Wouldn't this happen if ocv had an orderly wind up? I'm glad all creditors have to agree.

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

Some articles from http://www.goldcoastbusinessnews.com.au attached.

 

[selciper]

Re: Octaviar MFS Premium Income Fund PIF

All the way with you, Javier. We need to maintain a positive outlook while taking care of our interests at the same time. There's a long road to travel. You never know what lies ahead, hopefully it will work out very reasonably for us all. Clearly, WC would by now realise that the AG will continue its monitoring role in the future which is very important for all PIF investors. The exchange of information in this thread is instructive and valuable. Thanks, Breaker1, for the terrific initiative in commencing it.

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

My adviser just sent me this ...
EGM is 18 September



Investor Update: 1 August 2008
Unitholder meeting


Jenny Hutson, Chairperson of Wellington Investment Management Limited, the responsible entity for the Premium Income Fund is pleased to advise that the unitholder meeting to consider proposed changes to the operation of the Premium Income Fund will be held:

Date: 18 September 2008
Time: 10.00am
Place: Gold Coast Convention and Exhibition Centre, Cnr T.E. Peters Drive and Gold Coast Highway, Broadbeach

Meeting material will be forwarded to all unitholders by mid-August, and will be available for download from our website www.newpif.com.au.

It is important that each unitholder votes, either by proxy or in person, to ensure that each investor has a say in the future of your investment in the Premium Income Fund.

Debt arrangements

The Premium Income Fund has undertaken debt repayments in the month of July which have seen the debt position of the Premium Income Fund reduce from $55 million at the end of June to $20 million as at 31 July 2008. The remaining $20 million has been refinanced and will be repaid from asset realisations and borrowers from the Premium Income Fund refinancing over the next 90 days.

The new arrangements provide flexibility for the Premium Income Fund and it is the view of the board of Wellington Investment Management Limited that the refinance was consequently the optimal outcome for unitholders.

Offer from Octaviar Limited

Octaviar Limited has made an offer to each of its five creditors.

The board of Wellington Investment Management Limited has received an offer from Octaviar Limited in similar terms to the other creditors and is currently considering the proposal. The board remains in discussions with Octaviar Limited and its advisers in relation to an outcome.

The offer is for 22.5 cents per $1.00 outstanding or a secured debt position with the Octaviar Limited, with the debt to be repaid in 3 years from the proceeds of the sale of Octaviar Limited’s 33.3% ownership in the Stella travel business. The value of the debt alternative is almost entirely dependent on the value of the Stella travel business in 3 years and is therefore difficult to determine.
Octaviar Limited’s offer to the Premium Income Fund is also dependent upon all other creditors of Octaviar Limited agreeing to compromise what is currently due to them. If for example, only 4 of the 5 creditors owed money by Octaviar Limited reached agreement the offer to the Premium Income Fund could not proceed.

Octaviar Limited has clearly indicated that if agreement is not reached, Octaviar Limited will be wound up. This alternative is not economically desirable from the Premium Income Fund’s perspective as on a winding up it is estimated that the return to the Premium Income Fund would be 11.8 cents per $1.00 outstanding. The timing of the payments would also be very uncertain.

Wellington Investment Management joined all of the other creditors in the Supreme Court of Queensland on Thursday 24 July 2008 opposing the application to wind up Octaviar Limited. The application for winding up of Octaviar Limited has now been adjourned to 8 and 9 September 2008.

Full documentation in relation to the offer from Octaviar Limited is now available on Premium Income Fund website www.newpif.com.au.

If investors have any questions in relation to the Octaviar Limited offer or the upcoming Unitholder meeting, please contact the Wellington Hotline on 1300 854 885 or investorrelations@newpif.com.au.

Thanks PIFholder.

Part of the statement above that needs clarification is the paragraph in blue.

The offer seems to have changed from:
1] a] An immediate payment of approx. $48M, valuing debt to the PIF @ 15c & 22.5c in the $, excluding Stella & any further legal action OR a b] liquidation over 3 to 5 years, which appears to give only an extra 8M, including Stella.
TO including an additional new option c] "or a secured debt position with the Octaviar Limited, with the debt to be repaid in 3 years from the proceeds of the sale of Octaviar Limited’s 33.3% ownership in the Stella travel business. " Is this how you read it?

If that is the case, I would really like to get a handle on a rough ball park figure as to what that "secured debt position" may pay after about 3 years? This is a very interesting new offer and I would really like to be filled in more. I know that it depends on the "value of Stella in 3 years" but surely estimations can be made? Does it exclude access to the rest of OCV's assets besides Stella? We need more detail here?

Have other creditors received an enhanced offer like this one to the PIF?

Nevertheless, OCV LTD still has to pass the test of having ALL 5 creditors agree to the OCV LTD new offers before we can seriously consider the new offer, otherwise it's liquidation on OCV.

Who is the $20M refinancer and hoping no strings attached?

What is the procedure for Action Group members giving their proxy votes to other AG members? Will votes be accepted by mail or only at the September 18 meeting?

This WC announcement viewable on: http://www.newpif.com.au/ then click on company announcements "EGM date......"

 

[Javier]

Re: Octaviar MFS Premium Income Fund PIF

Stella must be able to be worth over what will be paid to the creditors if most decide to wait for the sale in 3 years. I mean just say we are all paid out..there would have to be something left for CS and co to keep OCV going or else what is the point for him..he is like 60 or 65 isn't he? I think he has a young family & Asian wife living in Singapore. He may even be looking at jail time if things go a bit pear shape for him in court soon with some dodgy S8 past dealings.

So is the payments as board member / CEO for as long as he is there all he will get? There is NO chance of his $200m plus ever coming back to him. What a greedy goose..he should have taken that sale in cash and rode off into the sunset..instead he took it in scrip and is in the doodoo. JH really should have advised him a little better there!!!

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

I have been plodding through the "Creditor Offer Document" now available on the Wellington website.
It says under "Liquidation Senario" for OCV on page 20 that PIF will get 11.8 cents in the dollar without Stella.
My understanding is that OCV cant liquidate without selling Stella, (surely that's right).
...and would'nt that give PIF a better "liqidation" payout from OCV than we have been told to date??
I am getting befudled with all this......anyone help?

Yep! That was an aspect brought up before - how can you have two liquidation options, one without Stella & one with Stella? If OCV is liquidated, surely the liquidator doesn't come along and say, this creditor gets a bit of Stella and that creditor doesn't! Doesn't make sense! Unless it's there to show investors what Stella is worth on liquidation i.e., an extra 14c in the $ over the 11.8c??

PIF, Immediate payment - 15c & 22.5c / liquidation without Stella -$1 11.8c / liquidation with Stella - $1 25.8c / Participating creditor return - $1 n/a
Is this last one "participating creditor return" the same as OCV's new offer, but in different words of "secured debt position" ??

 

[seamisty]

Re: Octaviar MFS Premium Income Fund PIF

New owner coming for Kooralbyn:::::August 2nd, 2008

A NEW owner is poised to take over the Kooralbyn Hotel Resort as early as next week.

The resort closed its doors two weeks ago under the instructions of liquidator Peter Lucas and they remained closed yesterday.

Mr Lucas, of PA Lucas and Co in Brisbane, was appointed liquidator to Kooralbyn International Hotels, which is understood to have accumulated debts of up to $60 million.

The liquidator did not return calls yesterday, but sources close to the deal said it was likely the resort would be open for business by next weekend if the deal proceeded.

The buyer is understood to be taking over both the resort business and the operation of the golf course.

Kooralbyn International Hotels is directed by New Zealand businessman Ray Schofield, who still controls the resort's property assets, which include the hotel, a 36-room golf lodge, golf course, tennis centre, polo fields and equestrian centre.

The Premium Income Fund, formerly controlled by troubled financial services group Octaviar (ex-MFS) and now in the hands of Jenny Hutson's Wellington Capital, is understood to have a $20 million exposure to Kooralbyn International Hotels.

The ownership of the resort remains clouded, with MFS at one stage touted as having an interest.

 

[DoraNBoots]

Re: Octaviar MFS Premium Income Fund PIF

The 11.8 cents in the $ liquidation estimate provided by JH in her communication to investors is if OCV assets (excluding Stella) are realised in the period to 31 Dec 2008. Again JH is quoting liquidation figures which exclude Stella!

Would be good if someone with experience reading these reports can read “KPMGs independent report of factual findings which noted no expectations” (see section 3.8 of creditor offer to request this)

Section 3.7 says "a Participating Creditor (i.e participating in the Secured Debt Arrangements)". But the table isn’t very helpful for the PIF as it says this option isn’t available for us. Do we assume we would also get 92.6c in the $. I think the term sheet reads like this will be negotiated between WC and OCV.

 

[Javier]

Re: Octaviar MFS Premium Income Fund PIF

I would hope 92.6c / $1 would be the case, (though there needs to be more concise figures) for PIF in three years..yes please where do we sign for that?

One thing I must say that it is finally good to see that JH has opted to inform us first via the WC website and not via the media, keep it up!!

 

[breaker1]

Re: Octaviar MFS Premium Income Fund PIF

The 11.8 cents in the $ liquidation estimate provided by JH in her communication to investors is if OCV assets (excluding Stella) are realised in the period to 31 Dec 2008. Again JH is quoting liquidation figures which exclude Stella!

Would be good if someone with experience reading these reports can read “KPMGs independent report of factual findings which noted no expectations” (see section 3.8 of creditor offer to request this)

Section 3.7 says "a Participating Creditor (i.e participating in the Secured Debt Arrangements)". But the table isn’t very helpful for the PIF as it says this option isn’t available for us. Do we assume we would also get 92.6c in the $. I think the term sheet reads like this will be negotiated between WC and OCV.

Well, Noteholders, Bondholders and PAC are getting promised 92.6c of OCV debt, what are we, chopped liver, that we shouldn't get the same? If your right about participating creditor being the same as secured debt arrangements, then we better pray that OCV LTD doesn't get liquidated!

Why were we not offered that option before?

Did Jenny subsequently negotiate that for us?

 

[Javier]

Re: Octaviar MFS Premium Income Fund PIF

I think that that is pretty much all she was doing just prior to and after the court hearing last week, Breaker. Negotiating the fund the same deal as everyone else. We are not chopped liver, and Ms Hutson can have caviar on toast for breakfast for the rest of her life if it means getting us all our money back in due course. She doesn't strike me as a person that wants to end up with egg on her face at the end of all of this..very much goal and success driven.

I would like to think that the people on this forum, and investors out there would have had something to do with driving her to get the best deal, I know for a fact that heaps of people have rung WC about our concerns for OCV to give us a fair go and for JH to show us that she may be good mates with CS, but business is business and this fund should be at the forefront.

I applaud you Jenny, and I applaud the efforts and work of the people here and beyond. I know this long journey has only just started and there will surely be many twists and turns ahead, but for the first time since this fund was frozen, I feel a slight glimmer of hope.

 

[Juan Mortyme]

Re: Octaviar MFS Premium Income Fund PIF

This from today's GC Bulletin.
Link: http://www.goldcoast.com.au/article/2008/08/02/14471_gold-coast-business.html

----------------------------
Surprise 'visit' part of S8 probe

Nick Nichols

August 2nd, 2008

INVESTIGATORS from the Office of Fair Trading made a surprise visit to the Phoenician building at Broadbeach yesterday ahead of a court case this month involving former S8 boss Chris Scott.

The investigators are understood to have spent several hours at the resort, which is now owned by the Stella Group after tourism company S8 was taken over by MFS in 2006.

An OFT spokesman yesterday the visit was not a 'raid', like those conducted on S8 offices in 2006.

"The Office of Fair Trading undertakes compliance inspections of businesses from a range of industries regulated under fair trading legislation," said the spokesman.

Bob East, chief executive of the Stella Hospitality Group, which operates 38 apartment buildings on the Gold Coast, yesterday confirmed the OFT visit related to the S8 investigation.

The OFT has brought the action against S8 company Driftcove and Mr Scott, as director, alleging more than 2900 separate breaches of the Property Agents and Motor Dealers Act 2000.

The allegations suggest Driftcove 'double-dipped' on accommodation revenue by diverting reservations through subsidiary booking companies and then receiving up to 42 per cent commission at some buildings.

Mr East said Stella had been given 'a clean bill of health' from the OFT.

"We are not under investigation," he said. "(The OFT officers) are investigating historical (events) before we bought that company."

Mr Scott is scheduled to appear in the Southport Magistrates Court on August 18 to face the charges.

The OFT said yesterday it was 'not appropriate' to 'comment on any matters currently subject to investigation or before the courts'.
-------------END------------

 

[sugar3157]

Re: Octaviar MFS Premium Income Fund PIF

Well, Noteholders, Bondholders and PAC are getting promised 92.6c of OCV debt, what are we, chopped liver, that we shouldn't get the same? If your right about participating creditor being the same as secured debt arrangements, then we better pray that OCV LTD doesn't get liquidated!

Why were we not offered that option before?

Did Jenny subsequently negotiate that for us?

Hi all, 96c would be awesome....but i think we are dreaming....If OCV is liquidated does that really matter being as WC now owns PIF...can we not still keep trading in the hopes that the market will go up?