stella collapse denied

Owners reject reports Stella Group 'on brink'

Scott Rochfort
April 24, 2009
"THE private equity owners of Stella Group have criticised reports that the travel retailer is on the brink of collapse, saying they were "unequivocally and completely false".

Three months after BusinessDay revealed that the CVC Asia Pacific majority-owned company had breached the terms of one of its banking facilities and was seeking breathing space over the repayment of $860 million in debt, Stella rejected a report that said its main lender, UBS, had been advised to put the group into receivership.

"Stella has a good working relationship with its banker UBS and has been working in an ongoing manner with them on an appropriate and prudent long-term capital structure for the business," Stella said in response to a newspaper story yesterday.

The group's resort arm, Stella Hospitality, argued it was yet to see any evidence of the economic slowdown that has hit other companies exposed to the travel sector, such as Qantas and Flight Centre.

"I've just seen the figures today and there's been no slowdown yet," Stella Hospitality spokeswoman Susan Boyd said. "It's just business as usual."

But this appears to contradict the group's most recent financial accounts. In its accounts for the year to June 30, a time when the economy was much stronger than it is now, the group reported a $42.7 million loss. The accounts, filed in December, also show that CVC reprieved the troubled group of a $25 million repayment due last month on a $320 million inter-company loan.

On top of this, Stella has about $860 million in debt, which was transferred when CVC bought its 65 per cent stake in the group early last year."

http://business.theage.com.au/business/owners-reject-reports-stella-group-on-brink-20090423-agrz.html

and many other articles on this just coming out.

What is instigating such diverse reporting then?