MFS Pacific faces receivership as creditors close in on parent

MFS Pacific faces receivership as creditors close in on parent

OPI Pacific director Jason MaywaldOctaviar Limited (formerly MFS), the Australian parent of New Zealand finance company OPI Pacific Finance Limited (formerly MFS Pacific), has been placed in receivership by its creditors,  which means it is much more likely that receivers will be called in for OPI Pacific. OPI has a 'put option' arrangement with Octaviar, in which Octaviar agreed to make good any losses on loans it managed for OPI Pacific. OPI recently increased the value of this option to NZ$300 million of losses. OPI Pacific is currently in a moratorium. Its estimate of potential recoveries from its loans dropped to NZ$67.96 million from NZ$102.7 million in March because of a deteriorating property market in Australia and signs that its second mortgages would be worth nothing.

"We are currently working with the Trustee and our advisors in relation to the potential impact the events with Octaviar in Australia could have on the Moratorium. We will also be working with the Voluntary Administrator in relation to our claim under the Put Option and our rights as a creditor of Octaviar. Our objective is to continue to negotiate an arrangement with Octaviar (through the Voluntary Administrator) that will deliver a repayment proposal that is consistent with the recent directions of Stockholders, and that will produce a better outcome than a liquidation of Octaviar," OPI director Jason Maywald said. John Greig and Nicholas Harwood of Deloittes will now take full control of Octaviar as voluntary administrators under the receivership. Fortress Credit Corp has also appointed its own receiver to Octaviar. "The situation with the Octaviar Group is complex and whilst the appointment of a Voluntary Administrator to Octaviar may not simplify matters as such, it may deliver a far better outcome for Stockholders than a liquidation of the Octaviar Group," Maywald said. MFS Pacific was placed in moratorium in March 2008. Perpetual Trustee is the trustee for MFS Pacific and Chief Executive Louise Edwards was quoted as saying in the New Zealand Herald that receivership was likely to be the best option. MFS Pacific owes 12,000 investors NZ$335 million, while its affiliate Boston Finance owes 1,500 investors NZ$35.8 million, according to our definitive Deep Freeze list, which puts the amount frozen in 41 finance companies, mortgage trusts and mortgage bond funds to NZ$5.667 billion in 170,029 accounts.

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