OPI in court bid to keep Octaviar afloat 5:00AM Wednesday July 23, 2008
By Tamsyn Parker
The directors of OPI New Zealand will head to the Supreme Court in Brisbane tomorrow to try and stop Queensland's Public Trustee from liquidating Octaviar - the Queensland property and finance company which owes millions to its subsidiary OPI Pacific Finance.
The Public Trustee is taking legal action on behalf of Octaviar's listed noteholders who have A$348 million ($446 million) tied up in the troubled company. If a liquidation proceeds OPI Pacific Finance investors could get back as little as 12.4c in the dollar.
It says Octaviar has defaulted on the notes, triggering an early repayment which was not due until 2011.
The case was to be held in September but the Public Trustee applied to have it brought forward on Friday after Octaviar announced a creditors' proposal. It has now been set down for Thursday and Friday.
A spokesman for OPI New Zealand, which is 38.8 per cent owned by Octaviar, said the directors did not support the liquidation proceedings.
"The directors have not yet had sufficient time to consider the offer that Octaviar is making to its creditors.
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Perpetual Trust, the trustee company of OPI Pacific Finance, said it would be watching the case.
Chief executive Louise Edwards said if the Public Trustee was successful in its application to liquidate Octaviar it would trigger a review of the moratorium put in place for OPI Pacific Finance investors in May.
About 12,000 investors have $313 million tied up in the finance company which first defaulted on interest payments in January.
A one-off payment of $23.1 million, equating to around 9c in the dollar, was returned to debenture investors soon after the moratorium was agreed to but further repayments rely on OPI New Zealand supporting other creditors of Octaviar to broker a standstill agreement.
That agreement has to be signed by August 29 or Perpetual Trust has the right to review the moratorium and send OPI Pacific Finance to the receivers. On Monday Octaviar said it had provided details of its offer to OPI Pacific.
Octaviar has said its offer to New Zealand investors will be similar to that offered to Australian investors - between 22.5c and 100c in the dollar.
New Zealand secured debenture holders may be at the lower end, with only 22.5c in the dollar offered to unsecured investors and 15c to unsecured noteholders.
However, Octaviar said liquidation estimates could see only 12.4c in the dollar returned to OPI Pacific Finance investors, although the sale of its 35 per cent stake in the Stella tourism business could boost that to 26.8c.
