just saw this on smh. didn't they just sell over 200m worth of assets in the last week or so?
http://business.smh.com.au/mfs-fire-sale-doesnt-touch-sides/20080128-1omz.html
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THE floundering Gold Coast property group MFS has conceded the forced sale of its three major listed investments has failed to repay any of a $155 million short-term debt due to expire in two months.
MFS's new chief executive, Craig White, said yesterday the $65 million raised from the fire sale of the company's cornerstone stakes in fund manager HFA and MFS Diversified Trust, along with its 3.5 per cent holding in retirement home operator Babcock & Brown Communities, has instead gone to "different financiers".
The company only last Friday revealed that the sale of its HFA stake, at half the price the shares were worth a month ago, was a result of a margin call.
On top of the $155 million owed to the US financial group Fortress, the additional short-term debts were only disclosed by MFS after Mr White replaced former chief executive Michael King last Monday. But Mr White has insisted neither Fortress nor any other lenders have called in their debts. In all the company owes $1.7 billion, most of it in long-term debt.
Mr White also defended MFS continuing the suspension of its shares from trading.
"It's inappropriate for us to be trading without being able to give certainty on these outcomes until they're worked through," he said, referring to MFS's desperate attempts to raise cash via the planned part-sale of its Stella tourism business. Mr White also conceded MFS could now look to sell other assets.
Shares in MFS have not traded since the day they crashed 69 per cent after the group proposed to demerge its Stella tourism business and raise $550 million from shareholders to reduce "indebtedness".
Since then, the company's outlook has deteriorated sharply. It is little over a week since former chief executive Michael King played down concerns surrounding the group's $150 million of short term debt. Now the company has conceded its survival depends on the part-sale of Stella.
Despite MFS's attempts to create some pricing tension in the sale of Stella, Mr White has also admitted the private equity group CVC was in a strong position to buy the business.
"I think CVC is in a good position to make a quick decision because they spent a lot of time looking at it," he said.
"Assuming CVC is one of the parties, they are a company that would have the ability to move more quickly."
CVC has already conducted due diligence and came close to buying Stella late last year but talks broke down over price. Stella, whose brands include Harvey World Travel and the hotel group Saville, has spent more than $2 billion on acquisitions over the past three years. But it is believed it could be sold for a fraction of that.
Mr White has insisted CVC is not the only interested buyer. "They put confidentiality clauses in all the proposals because none of them want to be seen as a loser in the transaction," he said.
MFS
mfs limited
