OCV octaviar limited

ocv creditor update

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    Octaviar Limited
    ABN 90 107 863 436
    For further information please contact
    Investor Relations: 131 637
    E-mail: [email protected]
    Website: www.octaviar.com.au
    Telephone: 1300 787 650
    SHARE REGISTRY
    Computershare Investor Services Pty Ltd
    Level 3, 60 Carrington Street
    Sydney NSW 2000
    ASX Announcement
    _______________________
    Creditor Update
    24 June 2008

    As previously announced the Octaviar Group needs to reach an accommodation with its large creditors
    so as to align the obligations to those creditors with the realisation of the Group’s assets.
    We continue in discussions with the large creditors regarding such an accommodation.
    Developments regarding these large creditors since the announcement of 5 June 2008 are set out below.
    Listed Notes
    As previously announced, the Public Trustee of Queensland (PTQ) is seeking winding up orders
    against Octaviar Limited and three subsidiaries in relation to unsecured notes and interest totalling
    approximately $351 million.
    The Octaviar companies deny that the monies are currently due and are opposing the winding up
    applications. At an initial court hearing on 20 June 2008 the applications were transferred to the
    Commercial Causes List of the Supreme Court of Queensland and have been set down for hearing on
    9 and 10 September 2008.

    Australian Taxation Office (ATO)
    Octaviar Limited recognised a liability of $52.5 million in its financial accounts at 31 December 2007
    regarding income tax for the year ended 30 June 2007. No assessment has been received from the
    ATO.

    On 19 June 2008 the Company received a statutory demand from the ATO for approximately $56
    million, being the deemed unpaid income tax due and approximately $4 million in general interest
    charges.
    Premium Income Fund (PIF)
    In addition to the $50 million claimed under the Support Mechanism previously announced, the
    Responsible Entity for PIF has now claimed damages against Octaviar Limited and an Octaviar
    subsidiary for $147.5 million in relation to investments made by PIF. A claim of this nature was noted
    as a possibility in the notes to the financial statements at 31 December 2007.
    Octaviar Limited
    ABN 90 107 863 436
    For further information please contact
    Investor Relations: 131 637
    E-mail: [email protected]
    Website: www.octaviar.com.au
    Telephone: 1300 787 650
    SHARE REGISTRY
    Computershare Investor Services Pty Ltd
    Level 3, 60 Carrington Street
    Sydney NSW 2000
    OPI Pacific Finance Limited
    As previously announced, provision was made in the financial statements of the Octaviar Group at
    31 December 2007 for an obligation of $246 million to OPI Pacific Finance Limited under a Put
    Option. An initial amount of $20 million was paid by Octaviar Limited in March 2008.
    On 19 June 2008 OPI Pacific Finance Limited advised of a damages claim for approximately $270
    million against both Octaviar Limited and an Octaviar subsidiary which provides management and
    other services.
    Unlisted Bonds
    As previously announced, an Octaviar subsidiary issued $100 million in unlisted bonds originally due
    to mature in 2011 and the Bondholders have commenced legal action in relation to these unlisted
    bonds. The hearing date was set for 21 July 2008.
    The winding up applications subsequently brought by the PTQ have triggered an event of default in
    relation to the unlisted bonds and we have agreed with the Bondholders that the Bondholders now have
    the ability to make the bonds due and payable. The litigation regarding additional guarantees that the
    Bondholders assert they are entitled to receive continues. The hearing date of 21 July 2008 remains
    relevant for these remaining matters.
    National Australia Bank Limited (NAB)
    The NAB demand for $40 million from Octaviar Limited pursuant to a guarantee regarding the NAB
    advance to the Living and Leisure Australia Group (ASX code: LLA) remains unsatisfied.
    LLA have recently announced further developments in the Arctic Capital proposal to recapitalise LLA
    and refinance its NAB debt. We have reached an in principle agreement with Arctic Capital regarding
    the sale to Arctic Capital of the Octaviar subsidiary which is the responsibly entity of the LLA Trust.
    That agreement is conditional on the release of the Octaviar Limited guarantee to NAB.
    David Anderson
    Company Secretary
 
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