mfs future less certain as village exits sale, page-2

athyrio,

The report in your post appears to refer to MPY borrowings as the following quote from the 12 Feb 2008 announcement by Ms Shearer shows.

"Borrowings.
MPY’s borrowings comprise a senior secured facility and a subordinated unsecured facility. These facilities total
approximately $180 million (including drawn working capital facilities).
Following a request from its senior secured lender to bring forward the maturity of its senior lending facilities,
the senior facilities mature on 30 May 2008. MPY’s unsecured facilities also mature on 30 May 2008. Prior to
the most recent volatility in the markets and the issues affecting MFS, MPY had believed that the refinancing of
its borrowings would be able to be completed in the ordinary course.
MPY is continuing to seek to refinance both of its facilities and is also seeking additional finance to fund MPY’s
growth initiatives. Further, MPY is considering the sale of certain assets to repay borrowings.
Following the decrease in MPY’s security price and the current voluntary suspension of trading of its securities,
the MPY Board has decided not to proceed with the previously announced Redeemable Convertible Preference
Unit facility from Cornell Capital."

The sale of assets at current fire sale values would leave a reduced net asset value in MPY and hence lower unit price following repayment of debt due in May. I think the best option from a unit holder's perspective is the follow up of the alternative sources of finance mentioned in Ms Shearer's latest announcement of 5 March 2008 as quoted below. While this might result in lower net asset values (if there are any assets left after the sales) at least there is a possibility of continuation of the trust and some salvage of value.

"As previously advised, MPY has received several proposals from parties interested in acquiring certain assets and businesses of the group.
MPY advises that it is currently undertaking an ownership review of its Oceanis and Treetops businesses and formal sales processes are being conducted for each business. A number of parties are currently undertaking due diligence in each process for the purposes of a firm proposal to acquire all or some of each business.
MPY also notes it is continuing discussions with a number of parties interested in a possible recapitalisation of the group including the provision of alternative forms of funding to the group.
MPY will keep security holders informed of developments."