This article is from the Australian Property Journal archive
THE survival odds are stacked against Octaviar Limited, creditors the Public Trustees of Queensland reiterated its determination to put the troubled financial and property company into administration.
Yesterday, the PTQ did not disclose to Australian Property Journal the number of investors it is representing.
But when asked whether the PTQ will hold in out-of-court negotiations with Octaviar, Acting Public Trustee Patrick Wedge said the court will hear the application for winding up Octaviar Limited, Octaviar Investment Notes Limited, Octaviar Investment Bonds Limited, Octaviar Financial Services Limited, and the appointment of a trustee.
“The Trustee is of the view that the time has come for the group’s affairs to be under the control of an independent liquidator whose first duty is to the creditors and for this process to be supervised by the Court,” he added.
PTQ claims Octaviar Investment Notes has defaulted on $351 million in bonds and interest.
“We have initiated this acting after careful examination and advice. It is our assessment that the half yearly accounts reveal some concerns and in particular, the sale of assets which involved large write-downs in book value.
“We are mindful of the fact that not all of the note-holders are sophisticated investors and for some, any loss of capital will cause hardship,” he continued.
Wedge said the PTQ was also concerned about the outflow of cash from the company that has seen a reduction in the net proceeds from the sale of the Stella interest to CVC Asia Pacific.
Last week, Octaviar’s company secretary David Anderson said PTQ’s default notice is invalid.
But he any attempts to arrange discussions with the PTQ regarding their notice have not yet been successful.
The Supreme Court of Queensland yesterday set a hearing date of July 16 2008.
James Packer’s Challenger Managed Investments Limited has also launched legal action against the company and no resolution had yet been reached.
In addition, the National Australia Bank demand on Octaviar Limited under the guarantee currently remains unsatisfied.
Meanwhile, the fate of Living and Leisure Group’s recaptilisation process is also hanging on outcome of Octaviar.
LLA’s warned investors that its restructuring deal with James Packer’s private equity arm Artic Capital Limited could fall over if Octaviar is forced into administration.
In an update yesterday, LLA said Arctic has conducted detailed due diligence on LLA and the debt facility that LLA has with the Octaviar Premium Income Fund.
LLA said Artic is satisfied with the process, progress of and results so far produced from the due diligence conducted and it is satisfied with the technical due diligence it has undertaken on the RE as the responsible entity of the Living and Leisure Australia Trust.
But Arctic notes that it has not reached a definitive agreement with PIF in respect of the acquisition of the PIF debt and that it still needs to obtain final settlement of the terms of, and security arrangements in respect to, the debt to be acquired.
“It (Artic) is still waiting on some commercial information in relation to the RE from the Octaviar Group to make a final assessment of the RE’s financial position and liabilities although, Arctic expects that the required information will be available to it shortly.
“Several of the conditions precedent to the underwriting agreement remain unsatisfied in the ordinary course and Arctic is continuing to work to satisfy those conditions precedent.
“NAB and LLA are still in discussions about the repayment of its senior debt and the NAB’s forbearance remains in place while these discussions continue,” LLA said.
Australian Property Journal
