canungra auction a king-sized flop

Kathleen Donaghey:::: Gold Coast Bulletin

December 15th, 2008

A SPRAWLING Canungra property owned by MFS founder Michael King failed to sell at auction yesterday -- in the same week when the company he built might be wound up.

Creditors are to gather in Brisbane on Wednesday and if an arrangement cannot be reached, the firm may meet its fate on Thursday, with shareholders unlikely to get back much of their investment.

Unsecured creditors could receive as little as between 1 and 4 cents in the dollar, according to a proposed deed of company arrangement.

The only secured creditor, Fortress Credit Corporation, could receive up to 65 cents.

Octaviar, formerly MFS, owes at least $2.7 billion, according to updated figures, and Mr King is said to be determined to sell off some of his land to help repay debts.

He is known for his $20 million polo and events property Elysian Fields, outside Canungra.

The property at auction yesterday was a 113ha adjoining parcel. The heavily vegetated land, which straddles the Beaudesert-Nerang Road at Wonglepong, was passed in at $950,000 after failing to reach the reserve. Mr King could not be contacted but real estate agent Geoff Brand, who denied the auction was part of a 'fire sale', said the embattled businessman was unhappy with the result.

About 30 people came to watch four bidders slowly lift the price from a start of $300,000, but none were willing to make the leap to $1 million urged by auctioneer Geoff Kerkow.

Instead, Mr Kerkow asked interested parties to come forward individually and negotiate new proposals in the hope an arrangement could be settled today.

Mr Brand warned that the failed auction was further proof vendors were asking too much in a soft market, and called on property owners to lower their expectations if they wanted to sell.

The King auction followed at least three weekend auctions in the Canungra area which failed to register a single bid.

Mr Brand said slow sales were a 'sign of the times' and it was time vendors 'woke up'.

He said only 20ha of the 113ha Mr King wanted to sell was 'useable'.

Spectators who attended the auction estimated the property's value to be $700,000 and only good for small hobby farmers.

The $950,000 passing-in price was still a huge improvement on the $570,000 Mr King paid for it in 20