Wellington Capital PIF/Octaviar (MFS) PIF

Re: Octaviar MFS Premium Income Fund PIF

Mutchy said:

Thanks for the spreadsheet Dora - very helpful.

Maybe there is no orderly wind up option because the 360 day law regarding suspension of payment of dividends means termination of the fund and payment to us within 360 days from the start of the suspension period. I am just guessing. Any one know why? I tried ringing the hotline but it was busy.

Mutchy

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Mutchy

Do you know where the 360 day law etc. is coming from.

JH mentioned it at the forums.

Thanks

Splitpin

Re: Octaviar MFS Premium Income Fund PIF

Assuming that the PIF continues under WC, I understand that the two distributions before Xmas will be on October 31 and December 24. I must admit that I can well do with that cash injection into my bank account. I doubt if I'm the only one with that growing sentiment - the months of austerity slowly grind on. Where would we be today if Octaviar had earlier liquidated the fund?

Re: Octaviar MFS Premium Income Fund PIF

Thanks Mutchy for your info!

The schemes constitution says redemptions cannot be delayed longer than 360 days but I don’t think there is any ‘law’ preventing this from being modified. Obviously WC are proposing a modification to redemptions (i.e. scaping them) with their changes.

Here’s what WC are saying. It gives the impression you can’t do it but it actually just says you need to modifiy the constitution. I called ASIC and they said they can’t see anything in the Corp Act which would prevent the constitution from being modified in this way.

selciper: if OCV wanted to liquidate the fund they would have had to notify us and we would have had a chance to put forward a resolution and I think we could have found another RE and certainly could have put forward the option for a long winding up of the scheme.

Re: Octaviar MFS Premium Income Fund PIF

Hi All, Time is of essence now to secure a 75% vote and there still seems to be a certain amount of confusion surrounding future outcomes for the PIF. I have just had a long phone conversation with WC and will share the information I received in the hope that it will clarify a few issues and uncertainties concerning our investment. Some are wondering why WC won't simply sell off all of the PIF assets in an orderly fashion and return the money to unit holders. The answer is because they have taken on the role as FUND MANAGERS, not ADMINISTRATORS!!! WC is not a benevolent society!Taking on the PIF is purely a business decision made by WC in the hope to make money and in doing so, PIF holders will share in the upside. Shortly all unit holders will receive their information packs where many questions are answered and clarified. The pack will also contain an 80 page explanatory memorandum on the changed structure of the Fund, approved by ASIC. I am guessing this will replace the old PDS until such times as the PIF has been stabilised and the future direction determined. OCV new board provided $3million for WC to proceed with the information forums, extra staff, operating/legal costs etc. to get to where we are at present. If WC do not get the vote to continue as a going concern, then you better have the fire brigade on speed dial, because a bonfire is what we will get. From a business perspective, if JH doesn't get that vote, then she owes no loyalty to us and only has until March to wind the PIF up. Why would WC want to change the constitution and extend the 360 day winding up period if there is no long term benefit for them? The expenses involved in engaging another RE with no prior knowledge of the PIF would be staggering in as much as the work already done by WC and paid for by OCV would have to be duplicated at our expense. Regarding the Sept 18th meeting, it will be a structured formal event, involving no discussion with guests as was the case at the Investor Forums.Anyone attending will be purely there as spectators.All votes will have been received and counted 48 hours prior to the meeting. In the event that the 5 main creditors of OCV do not accept the offer and OCV will be liquidated now as opposed to over a 3 year period, we will receive 11.8cents in the $ for only the $50mill support facility as this debt has been legally aknowledged! Even though OCV has recognised the remaining $147mill it has not been legally aknowledged at this point! So if liquidators step in we are up the creek.JH is still in discussion with OCV to negotiate 22.5cents or better for the whole amount. So even if OCV creditors accept the offer, it will still be wound up over the 3 year period. It will not remain an ongoing concern after that time, merely giving the company time to realize an orderly wind down. Regards, Seamisty

Re: Octaviar MFS Premium Income Fund PIF

Am I being naive, or is this what liquidation means? Let’s say we get not 14% but an optimistic 30% with an “orderly” liquidation. E.g. $30k on $100k investment. What do we then do? Invest the $30k at 8.5% to give a return of $2,500 p.a. on an inflation depleting asset.
With Jenny, a $100k original investment will return 6 cents or $6,000 with the chance of the original investment being recovered over time. Please can somebody tell me if there is any logical reason we should go for any sort of liquidation??

Re: Octaviar MFS Premium Income Fund PIF

JohnH said:

Am I being naive, or is this what liquidation means? Let’s say we get not 14% but an optimistic 30% with an “orderly” liquidation. E.g. $30k on $100k investment. What do we then do? Invest the $30k at 8.5% to give a return of $2,500 p.a. on an inflation depleting asset.
With Jenny, a $100k original investment will return 6 cents or $6,000 with the chance of the original investment being recovered over time. Please can somebody tell me if there is any logical reason we should go for any sort of liquidation??

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Hi all, JohnH you are correct..liquidation is not our answer...to liquidate would be financial suicide...only those investors who are mentally challenged won't vote for JH....cheers....

Re: Octaviar MFS Premium Income Fund PIF

LA Group completed recapitalisation

The Age, August 6, 2008 - 4:28PM

Living and Leisure Australia Group (LLA) says it has completed its recapitalisation, as described in its July prospectus.

The major elements of the proposal include new stapled securities under the rights offer to raise $100 million and the introduction of new securityholders.

The recapitalisation will refinance more than $200 million of debt, reducing gearing from over 50 per cent to 30 per cent and restructure unsecured debt owed to the Premium Income Fund (PIF).

The company will also complete the documentation by Arctic Capital Limited to acquire Living and Leisure Australia Management Ltd (LLAM), the responsible entity of the Living and Leisure Australia Trust, from the Octaviar group (formerly MFS).

In a statement, LLA said the company wanted to retaining maximum value for existing securityholders following the liquidity issues confronting its previous major security holder and the demands by LLA's former senior secured facility provider to repay debt.

Good to see LLA starting to get on its feet, but with the OCV offer to the PIF @ fixed rate for immediate cash, I guess it doesn't make much difference. But if the secured longer term offer is taken by the PIF, it should help our $ total return.

Re: Octaviar MFS Premium Income Fund PIF

Anybody expecting a quick response by ASIC to our woes might like to read an item by Michael Pascoe in today's edition of Crikey. It seems that, judging by example, we should be patient.

Re: Octaviar MFS Premium Income Fund PIF

Thank you so much Seamistry. Thank you. Maybe now people here may start to understand what WC's role is and how much time and money it has taken to get to where we are now. How in the hell can people on here say, well why don't we just get another RE to liquidate in an orderly way. Answer: 'cos it ain't that easy!

Like I said in a previous post, if JH can't get 75% with now that we know $3m worth of effort, then what hope do we have with anyone else AND getting 75% of people's units to agree? Answer: NO CHANCE. DUCK EGGS!!

Re: Octaviar MFS Premium Income Fund PIF

seamisty said:

If WC do not get the vote to continue as a going concern, then you better have the fire brigade on speed dial, because a bonfire is what we will get.

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If the changes WC are proposing don’t get 75% of the vote then WC will have to notify unit holders the schemes purpose cannot be accomplished and must be wound up. (I recall JH saying WC would not be involved if the scheme is to be wound up.) We would have 28 days to call a meeting where it could be proposed that the constitution be modified to allow it to be wound up after the March 31 deadline. This would require 100 unit holders putting their name to calling the meeting and then 75% of unit holders preferring a long windup over the March 09 deadline. I know I sleep better knowing this is an option if "WC doesn't get the vote".

Re: Octaviar MFS Premium Income Fund PIF

Dora

I commend your character and initiative in regard to asking ASIC a very basic question on behalf of all investors which concerns our fundamental rights .

This should have been investigated months ago by others.

I had previously mentioned in a post, the circumstances whereby OCV (King) were able to change the Constitution of the PIF at will and yet we were ,seemingly bonded to a clause in that same Constitution to permit a fire sale liquidation of our assets over a 360 day period as Jenny Hutson had led us to believe ,you have now proved to all that this is blatantly untrue.

Somebody mentioned ,that Jenny Hutson is a businesswomen and her basic raison d'être is to make a profit, therefore apparently that factor makes it acceptable that she does not have to extend the common decency of telling investors the truth regarding other alternatives .

In respect of liquidating the assets at fire sale price, I have stated repeatedly that course of action would be a disaster ,but apparently Jenny Hutson has no problems with her conscience on just how much destruction that would cause to peoples lives, as she is apparently more than prepared to carry out that option, if she does not get her way.

There is no doubt, that her traveling road show circus, at about 80000 dollars a venue has indeed cost the PIF a small fortune. However this was Public Relations exercise and was entirely unnecessary, any another replacement RE would simply have come in a done due diligence at negligible cost .

Perhaps instead of quoting Theodore Roosevelt JH should take a look at Sir Walter Scott.

“Oh what a tangled web we weave when first we practice to deceive”

. I have always believed that if our AG had a structure, we would have had the capability to look for another RE that would offer another alternative to the very unpopular NSX listing and a fair and reasonable redemption policy ,that would allow the many retirees and aged pensioners access to investment money at NTA value in what little remains of their remaining years .

In one week we will, see if Wellington Capital has agreed to make any concessions and addressed the many concerns of investors in these matters. I will suspend my judgment until that day.

Re: Octaviar MFS Premium Income Fund PIF

While I know there are some investors in the PIF who are not totally convinced of WC's ability to restore the unit value and bring stability to the Fund, I think good sense will prevail and the majority will vote in favour of non liquidation. Now is not the time to create instability and uncertainty, but to demonstrate a united front and give support to the ONLY RE on the horizon at the present time!!! If in 6-12 months time WC prove to be incompetant and not working in the best interest of PIF holders we can reassess the situation and endeavour to make alternative arrangements. The Economic climate overall is currently looking rather dismal, there is no way the PIF would have been able to sustain the previous rate of return in view of property defaults and the downturn of residential and commercial developments. There are now also indications that bank interest rates have peaked due to the economic slowdown. There is a bigger picture emerging and all previous comfort zones are at risk of being de-stabilized, managed superannuation funds are a classic example, posting negative returns for the first time in many years. Chris Scott and Jenny Hutson have become 'scapegoats' for a select few in my opinion, but I am fully prepared to put my support behind them at this time until proven otherwise. Regards, Seamisty

Re: Octaviar MFS Premium Income Fund PIF

Article in goldcoast.com.au today

Re: Octaviar MFS Premium Income Fund PIF

Jadel said:

I had previously mentioned in a post, the circumstances whereby OCV (King) were able to change the Constitution of the PIF at will and yet we were ,seemingly bonded to a clause in that same Constitution to permit a fire sale liquidation of our assets over a 360 day period as Jenny Hutson had led us to believe ,you have now proved to all that this is blatantly untrue.

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Hi Jadel.

P37 of the PDS "We may alter the Constitution if we reasonably consider the variation does not adversely effect the Unit Holder's rights. Otherwise, the amendment must be approved by special resolution at a meeting of Unit holders". The scope of the term 'adversely effect' would often have many shades of grey.

I believe this amount of Board freedom to amend a constitution is common. Boards need to be able to cost effectively make trivial changes because of laws changes and constitutions often have errors and omissions.

All,

What difference does our vote make anyway? Might as well give WC a go. How many of us even remember the 2006 vote let alone what we were voting on and let alone the ramifications? Changing the RE fees from a flat rate (0.7% I recall) to 'all surpluses' seemed like a good idea to me at the time. But it increased MFSIM's take from $11M ($7.8M + $3.2M) in 2006 to $17M ($16.1M + $0.9M) in 2007. That move cost us unit holders $6 million. And I'm suspicious that the $60M units bought by MFS Management in June 07 and whipped out before Jan 08 had something to do with artificially jacking up 'profits'. And where's the value to us in the $50M 'support facility' now? In hindsight we weakened our position with the 2006 vote. But now that the truth is out about PIF and JH is being relatively forthcoming and pragmatic - we don't want to weaken our position? Seems self depracating to me. Yes - once bitten twice shy - but in rejecting WC would we be punishing the 'sins of the father' to our own detriment?

More importantly - where does it say a liquidation MUST be FINALISED by March 2009?
My guess: if the redemption clauses in the constitution aren't amended by then, WC will no longer be able to operate the fund without breaking the law. They won't want to do that so sometime after March 2009 somehow someone will appoint an administrator. How an administrator manages a wind-up? I.e. over 6 months or over 3 years? I don't have a clue.

To me, JH was clear that the 14c was the extreme, that it was part of WC's sales pitch. I don’t regard it as a deception. Insensitive/Oversell? - probably yes (and it would have been a difficult judgement call by WC). But in effect, the 3 to 5 years WC is asking for to try and achieve $1 IS an orderly wind-up. At a cost to us of an industry competitive 0.7%. Yes – we would be giving WC a freer hand than to an administrator but JH’s motives are clear to me, to maximise the funds under management and hence profitability for WC. And in a competative funds market, this motivation is profitable for investors too. Right? If we’re not happy with WC in 3 yrs time we can always get another RE, Correct?

I took a punt by re-investing in PIF. I took a punt with the 2006 vote. Here's to 3rd time lucky. Eeek.

Looking forward to those voting papers. Are we going to have some postings or what!

Re: Octaviar MFS Premium Income Fund PIF

seamisty said:

Hi All, Time is of essence now to secure a 75% vote and there still seems to be a certain amount of confusion surrounding future outcomes for the PIF. I have just had a long phone conversation with WC and will share the information I received in the hope that it will clarify a few issues and uncertainties concerning our investment. Some are wondering why WC won't simply sell off all of the PIF assets in an orderly fashion and return the money to unit holders. The answer is because they have taken on the role as FUND MANAGERS, not ADMINISTRATORS!!! WC is not a benevolent society!Taking on the PIF is purely a business decision made by WC in the hope to make money and in doing so, PIF holders will share in the upside. Shortly all unit holders will receive their information packs where many questions are answered and clarified. The pack will also contain an 80 page explanatory memorandum on the changed structure of the Fund, approved by ASIC. I am guessing this will replace the old PDS until such times as the PIF has been stabilised and the future direction determined. OCV new board provided $3million for WC to proceed with the information forums, extra staff, operating/legal costs etc. to get to where we are at present. If WC do not get the vote to continue as a going concern, then you better have the fire brigade on speed dial, because a bonfire is what we will get. From a business perspective, if JH doesn't get that vote, then she owes no loyalty to us and only has until March to wind the PIF up. Why would WC want to change the constitution and extend the 360 day winding up period if there is no long term benefit for them? The expenses involved in engaging another RE with no prior knowledge of the PIF would be staggering in as much as the work already done by WC and paid for by OCV would have to be duplicated at our expense. Regarding the Sept 18th meeting, it will be a structured formal event, involving no discussion with guests as was the case at the Investor Forums.Anyone attending will be purely there as spectators.All votes will have been received and counted 48 hours prior to the meeting. In the event that the 5 main creditors of OCV do not accept the offer and OCV will be liquidated now as opposed to over a 3 year period, we will receive 11.8cents in the $ for only the $50mill support facility as this debt has been legally aknowledged! Even though OCV has recognised the remaining $147mill it has not been legally aknowledged at this point! So if liquidators step in we are up the creek.JH is still in discussion with OCV to negotiate 22.5cents or better for the whole amount. So even if OCV creditors accept the offer, it will still be wound up over the 3 year period. It will not remain an ongoing concern after that time, merely giving the company time to realize an orderly wind down. Regards, Seamisty

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Thank you seamisty, again commonsense comes to the fore,there are some, on this forum who are great on research but lacking in the reality of our situation,what you have just disclosed is exactly what i had discussed via E/MAIL with breaker1 yesterday,JH IS our only hope in this situation, the third option which wasn't given to us for the obvious reason, WAS, never an option,this woman is not the good fairy for us alone .Cheers Flatback

Re: Octaviar MFS Premium Income Fund PIF

DoraNBoots said:

If the changes WC are proposing don’t get 75% of the vote then WC will have to notify unit holders the schemes purpose cannot be accomplished and must be wound up. (I recall JH saying WC would not be involved if the scheme is to be wound up.) We would have 28 days to call a meeting where it could be proposed that the constitution be modified to allow it to be wound up after the March 31 deadline. This would require 100 unit holders putting their name to calling the meeting and then 75% of unit holders preferring a long windup over the March 09 deadline. I know I sleep better knowing this is an option if "WC doesn't get the vote".

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And i thought Magoo had the only negative thoughtsFlatback

Re: Octaviar MFS Premium Income Fund PIF

Duped,

Trust me on this, in three years time this forum and all the personalities on it will just be a distant memory.

I will probably be in a nursing home with Alzheimer’s disease (am half way there already)

The PIF will probably have very few of the original investor left in the fund after people sell out from because they have had a gutful .Or because of a Placement or Rights Issue.

And will be trading on the NSX or ASX at a pittance.

And JH will still be happily picking up her annual fees from the management Rights

Re: Octaviar MFS Premium Income Fund PIF

Hello all been thinking Yes i koow what your thinking WHAT WITH I wonder if our wonder women JH can extend the life of a lot of the unit holders As a lot of us have not got much time left If its takes 5 to 7 years to get back something a lot of us wont be around Please dont say there is the NSX That is not going to work Maybe the ASX but no way the NSX //////////////////

Re: Octaviar MFS Premium Income Fund PIF

Duped said:

Are we going to have some postings or what!

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Hello Duped
All quiet on the Western Front today.
I think most of us are exhausted from endlessly regurgitating the various permutations about the future of the PIF. Roll on the vote! The result may give us more to talk about.

Rance

Re: Octaviar MFS Premium Income Fund PIF

Jadel said:

Duped,

Trust me on this, in three years time this forum and all the personalities on it will just be a distant memory.

I will probably be in a nursing home with Alzheimer’s disease (am half way there already)

The PIF will probably have very few of the original investor left in the fund after people sell out from because they have had a gutful .Or because of a Placement or Rights Issue.

And will be trading on the NSX or ASX at a pittance.

And JH will still be happily picking up her annual fees from the management Rights

Click to expand...

Yes its Mr Bad News I could not agree more what Jadel is saying i was thinking of going to the meeting at th GC but whats the point none of us can have a say Its just take it or leave it . A lot of unit holders might just leave it they are that pi;;';' off with the whole thing /////