concrete actions needed, page-22

I agree with Seamisty remember the Fund was virtually under the control of RBOS and the Assets could have been Fire Saled at moments notice therefore realistically how much is the Option worth not enough to make any significant difference in the chances of survival for OCV unfortunately imho




I The report notes;
• A breach of a ratio covenant of loan facility with a third party bank resulting in interest bearing liabilities of $184 million becoming repayable on demand as at 31 December 2007 (discussed further below under ‘’Loan Facility Agreement”);
• Uncertainty surrounding MFS Limited and its related entities which has impacted the recoverability of certain assets of the Fund.
As such, the Fund’s auditor is of the view that there is material uncertainty as to whether the Trust can continue as a going concern.This reflects that in the short term, there are circumstances outside the control of MFSIM Board that may potentially impact the management of the Fund and the value at which assets may be realised.To manage this situation, MFSIM has commenced implementation of a considered plan to repay the bank as soon as practicable and maximise the recovery of all Fund assets. We will update you on progress in this regard in coming weeks.
LOAN FACILITY AGREEMENT
The Fund currently has a $184m loan facility with a third party bank. As noted above MFSIM is in default of the loan agreement. As a result, the loan became repayable on demand. Recent negotiations with the bank have resulted in a standstill agreement with the bank to 31 March 2008 to suspend their rights to take action as a result of the breach of the financial ratio covenant.
Under the terms of the standstill agreement MFSIM cannot deal with the assets of the Fund, including for the purposes of making distributions or paying expenses on behalf of the Fund, without the approval of the bank. As a condition of the standstill agreement, the bank has requested that MFSIM submit a proposal for the orderly realisation of assets to repay the loan. MFSIM is currently finalising this proposal with its Advisors. MFSIM is in further discussions with the bank to obtain an extension of the standstill agreement before 31 March 2008. Any such extension remains at the discretion of the bank and is therefore uncertain. No such agreement has yet been reached. It is MFSIM’s objective to pay down the bank loan facility as soon as practicable.