octaviars debt to pif, page-7

Athryio, I have been following this for some time. But I just do not understand what is going on here. Maybe you can help me?

Stella - how can Scott, Hutson or PIF get all (or part) of the OCV 35% of Stella? To Scott, it would be a blatant related party transaction. Very obvious. ASIC/ASX etc etc would be all over it. To Hutson/PIF, it would not be a related party transaction but there would have to be a market related price. The OCV Board would have to sign off on it. And I reckon that CVC would have to agree as there would certainly be a shareholders agreement giving CVC first right of refusal - this is always the case. And where would PIF get the funds? Would RBS allow it given that it is rumoured that RBS has a cash lockup on PIF as it wants all its loans back? This rumour just does not make any sense at all. Is there are factual basis for this rumour at all?

Also, there seems to be a view that OCV is pushing assets into PIF. Can anyone tell me a single asset that has gone into PIF or Hutson's company apart from the RE?

And how much is the PIF RE worth? As Seamistry pointed out, PIF is a performance based fund which is obviously not performing - so no fees are flowing to the RE but OCV (and now Hutson) pick up considerable costs. REs are valued at 4 times earnings - so what is 4 times zero? Or more to the point, what is 4 times a big loss? Certainly not a positive figure. I just do not get this at all!!

Also, how does PIF gain from liquidation? The receivers come in; huge fees are generated by the liquidators; it takes years to finalise; assets are sold at firesale prices instead of proper work out values. Who wears the cost of all the extra costs and the losses from assets sold at firesale prices - PIF unitholders (of course). So, once again, how do unitholders gain from liquidation? I do not get this either.

My guess is that PIF unit holders would be far better off with a competent manager doing a workout than being liquidated due either to PIF being wound up in its own right or because it somehow gets caught up in an OCV windup (though it seems to me that the idea of the RE moving to Wellington Capital was to remove the possibility of getting caught up in a possible OCV windup). I would have thought this was self evident. Once again, I just do not understand all this talk about getting a liquidator in!!