Nick Nichols ;; Stable Return Tipped for Living and Leisure
21May08
SECURITIES in Living and Leisure Australia are poised for a return to trading this morning after the ski resort owner last Friday announced a debt swap deal with a private equity firm controlled by James Packer.
The relisting is seen as another positive step in the long-running MFS saga, and follows the return to trading last week of GEO Property Group, formerly known as MFS Diversified.
Living and Leisure Australia (LLA) is planning a major recapitalisation that would see up to $90 million raised via a rights issue and $70 million in debt repaid to the Premium Income Fund, the former flagship vehicle of MFS, now known as Octaviar.
Arctic Capital, a wholly owned subsidiary of Mr Packer's private company Consolidated Press Holdings, has agreed to take on $63 million of the Premium Income Fund debt and to underwrite the rights issue.
Both LLA's and GEO's return to the boards are seen as a step in the right direction for the embattled companies, which have been caught up in the debt crisis that has engulfed Octaviar.
This morning's resumption of trading will leave Octaviar and its New Zealand subsidiary, OPI New Zealand, the only companies from the group yet to relist since being suspended from trading in January.
Octaviar still retains a 19.9 per cent stake in LLA and would be looking at a stable first day of trading.
GEO's securities slid about 16 per cent to 40c last Thursday, trading in a narrow band around this level since last Thursday.
The Packer element is widely seen as offering some support for LLA's securities, although selling pressure is likely to also result in a lower opening today.
LLA's securities last traded at 36c each.
Arctic Capital is said to be keen on LLA's assets, which include Victorian ski resorts Falls Creek and Mt Hotham, and global aquarium business Oceanis.
Mr Packer has a majority stake in the Perisher Blue ski resort and Arctic Capital is said to be keen on expanding the Oceanis business into Asia.
LLA Price at posting:
0.0¢ Sentiment: None Disclosure: Held
