ocv slow death / pif non bank loan

1] See article MFS/OCV below
2] I have requested WC to advise PIF investors with the name of the provider of the "non bank loan" @ 20% - awaiting a reply.
Breaker9

"MFS future still not resolved one year on"

Nick Nichols, business editor

January 24th, 2009

MORTALLY wounded 12 months ago, Octaviar continues to suffer the slowest of deaths.

This week marks the first anniversary of that woeful day when company founder Michael King fumbled his way through a national press conference after announcing the company's need to raise $500 million from investors.

It was the morning of January 18, 2008, and by the close of trading that day, the company, then known as MFS, suffered a massive 90 per cent drop in its share price.

The sell-off marked a complete evaporation of investor confidence in its business model.

MFS's shares were frozen from trading on January 21 and they are unlikely to trade again.

The company, now little more than a skeleton of the former ASX 200 company once touted as a mini Macquarie Bank, appears destined for an orderly demise, but the timetable has been thwarted by one of its creditors, the Public Trustee of Queensland (PTQ).

Chief executive Craig Chapman and director Chris Scott, who forced their way on to the MFS board in a decisive, but ultimately futile, coup to protect shareholder interests in April last year, are the first to admit they have had to stay in the job longer than anticipated.

Both concede they are just waiting for the inevitable, a measured winding-up of the company after creditors are paid out.

The process would have been firmly under way but for the actions of the PTQ, who put the brakes on a deed of company arrangement (DOCA) agreed to by remaining Octaviar creditors in December.

The trustee has consistently sought a liquidation of Octaviar and this time has targeted Fortress Capital's status as a secured creditor to Octaviar in its latest bid to stall the DOCA process.

It has called for a court ruling on the matter, and that is set down for March 6.

The intransigence by the PTQ appears to have prevented smaller creditors, even those on whose behalf it is acting, from recovering 100 per cent of their debt.

A full payout for those owed up to $5000 each was a key feature of the first payout deal proposed in July by Mr Chapman and Mr Scott. The balance of creditors would have received about 22.5c in the dollar.

Now, creditors are said to be lucky to get just 3c in the dollar.

The PTQ, acting on behalf of 560 noteholders owed about $350 million, has always opted for a winding-up of Octaviar rather than accepting a payout offer.

Some sources have suggested the PTQ's actions could become the subject of litigation by Octaviar's non-noteholder creditors.

Already, legal bills on both sides are said to have reached $10 million.

Mr Scott yesterday said the longer the process was drawn out the less money was available for creditors.

After selling majority control of its tourism business Stella to CVC Asia Pacific, Octaviar received $409 million cash in February and still had about $100 million of that in the bank at the end of December.

Mr Scott described the squabbling over Octaviar as an 'argument between different bodies about who's going to get their hands in the bikkie tin'.

The PTQ has given nothing away about its motives.

Lawyers would only ever say they are 'doing their job'.

Octaviar itself has pitifully few assets left.

Among them is the QDeck, the observation tower at Q1, and the Circle on Cavill retail centre.

"There's no pot of gold that we can see," said Mr Chapman.

Mr Chapman is also unable to say how much longer the company will remain in administration or when the end will come.

"In July last year, we would have said we would have had it signed and sealed by August," he said of the original payout offer. As for regrets, there may be a few.

"We've put our lives on hold to come and do this," said Mr Chapman.

Mr Scott said the reasons for coming on board were fundamental, as were the reasons he remained.

"We stuck our hand up to have a go," he said.

"It would be easy for us to walk away, but we feel a commitment to see it through."