This article is from the Australian Property Journal archive
MFS Living and Leisure Group told investors yesterday it had breached debt covenants and has received several proposals to buy the company's certain assets.
Whilst investors turned up to approved the name change to Living and Leisure Australia at yesterday’s Extraordinary General Meeting, they were also told the company is looking to sell assets to repay debt.
Acting chief executive John Schryver said at the end of February 2008, Living and Leisure Australia had borrowings of approximately $185 million excluding Northbank.
Schryver said during 2007 the company breached certain debt covenants with the senior lender and agreed to bring forward the maturity date from 2009 and as at June 30 2007 non-current borrowings will be reclassified as current.
He added that the company is currently in negotiations with the senior and unsecured lender to extend the term of the facilities to 30 June 2008, subject to the sale of assets, refinancing or recapitalisation.
Schryver said the company has received several proposals from parties interested in acquiring certain assets and businesses, in particular the aquarium assets, and has allowed a number of parties access to materials for the purpose of making a firm proposal.
“All proceeds from potential sales will be used to repay debt,” he added.
Meanwhile, Schryver said the company’s recent performance has been adversely impacted the strength in the Australian dollar affecting conversion of overseas earnings, economic and ongoing political uncertainty in Bangkok and adverse weather conditions in Busan and Shanghai in China.
But he said expansion of Melbourne Aquarium, which will double the footprint of the aquarium is progressing well with a planned September 08 opening and the Northbank property development is on schedule and is expected to deliver significant cash flows on realisation in March next year.
MPY’s share price closed unchanged at 36 cents.
Australian Property Journal
