Investors say yes to new OPI deal
By DAVID HARGREAVES and KRIS HALL - BusinessDay.co.nz | Monday, 08 September 2008
Investors in failed finance company OPI Pacific Finance today voted to enter into a new arrangement with its parent company Octaviar that could see the investors eventually presented with a cash offer of up to 22.5 cents in the dollar for monies owed.
However, the new deal may yet be in vain if other creditors of cash-strapped Octaviar force that company into liquidation.
OPI (formerly known as MFC Pacific Finance) has about 12,000 investors. Some $256.7 million is owed to debenture holders and $56.7 million to note holders.
The company froze payments to investors in January after Queensland company Octaviar (then known as MFS) withdrew financial support due to its own parlous financial position.
OPI investors agreed to a moratorium in May, but that deal had been dependent on Octaviar striking similar deals with other large creditors on the same terms.
Today's deal will also be put to these other creditors in meetings to be held over the next few days. If the other creditors don't agree then its is possible that Octaviar would be placed in liquidation.
If the other creditors do accept the deal, however, then at the end of this month Octaviar will offer to buy out both debenture holders and note holders. The debenture holders will be offered 22.5c in the dollar, less the 12.12c in the dollar they have already received, while note holders will be offered 15c in the dollar.
It is believed about two thirds of debenture holders and around 85 percent of note holders voted on the proposal. Over 97 percent of the debenture holders that voted were in favour, while 99.6 percent of note holders voting approved.
Today's meeting in Auckland was, like the moratorium meeting in May, a lively affair. OPI director Jason Maywald told concerned investors the new arrangement was better than had been offered by Octaviar in May.
"Without taking the arrangement things could get messy. All of the larger creditors are going to be fighting to get as much money as they can out of it. The only winners [of a liquidation] will be the lawyers and receivers.
"It’s a question of Octaviar’s faith and ability to see this through whether there will be any cash available at the end of the moratorium in 2011. The information they have produced says they can do that.
"I can’t speak for individual investors, but the best thing for the company [OPI] is to enter into this and for Octaviar to survive."
OCV
octaviar limited
