mfs future less certain as village exits sale

MFS future less certain as Village exits sale


* Scott Rochfort and Miriam Steffens

VILLAGE Roadshow has ditched plans to buy the aquarium assets of MFS Living & Leisure, casting more doubt on the survival chances of the stricken fund.

Still faced with the daunting task of repaying $180 million of debt by May 30, MFS Living said that it was confident of remaining a going concern despite still failing to find a buyer for any of its assets.

The group's chairwoman, Julanne Shearer, said "a number of parties" had begun due diligence on MFS Living's Oceanis business, which owns aquariums in Melbourne, Pusan, Shanghai and Bangkok.

"They are substantial parties, quite capable of doing the deal if they chose to do the deal," she said. "They are parties that have similar types of assets."

Despite MFS Living opening its books only after its exclusive talks with Village broke down on Friday, Ms Shearer said she was confident due diligence could be completed before the company needed to repay its debts.

However, it is unlikely any buyer will pay the $200 million at which MFS Living valued Oceanis on its books on June 30 last year, nor the $132 million it was valued a year earlier.

Macquarie Leisure is believed to have ruled itself out as a buyer.

Ms Shearer said MFS Living was also considering a possible recapitalisation, "including the provision of alternative forms of funding to the group. Quite a number of discussions are quite well advanced," she said.

However, she gave no hints at to who the group's possible saviours could be.

She said MFS Living had enough funds to get through the next few weeks.

It recently drew down the rest of a $67 million unsecured debt facility provided by MFS's Premium Income Fund.

This is despite the decision of the $770 million fund to bar its unitholders from redeeming their investments.

The fund also extended the maturity of the loan from the end of this month to May 30. MFS Living also is due to repay a $110 million secured loan from NAB by May 30.

In a sign that MFS Living is becoming increasingly desperate, the company has also given up on its plans to quarantine its Mount Hotham and Falls Creek Victorian ski field operations from the selling process.

"We're looking at all of our assets and we're confident of the potential of all of them," she said.

Village Roadshow's managing director, Graham Burke, said the breakdown in the talks with MFS Living came down to price.

"We weren't able to arrive at a deal that was satisfactory, so we amicably parted ways," he said.

When asked how much Village had offered, Mr Burke replied: "Not gonna tell you."

MFS Living plans to hold an extraordinary shareholder meeting on March 31, when it is proposing to change its corporate name to Living and Leisure Australia Limited