Octaviar struggles on multiple fronts

Octaviar, the company that grew out of troubled MFS, is still struggling for survival in the face of multiple demands from creditors, according to a statement released on the Australian Securities Exchange (ASX) this week.

The statement, issued by the company yesterday, revealed that Octaviar and three of its subsidiaries was still fighting winding up orders from the Public Trustee of Queensland in relation to unsecured notes and interest totalling $351 million in circumstances where Octaviar denied the monies are currently due.

As well, the company said that it recognised a tax liability of $52.5 million for the year ended June 30, last year, and the responsible entity for its Premium Income Fund had claimed damages against Octaviar and an Octaviar subsidiary for $147.5 million in relation to investments made by the fund.

The ASX announcement also restated that provision had been made in the financial statements of the group for an obligation of $246 million to OPI Pacific Finance under a put option, with an initial amount of $20 million being paid by Octaviar in March.

However, it said that OPI Finance had this month advised of a damages claim for approximately $270 million against Octaviar and a subsidiary that provides management and other services.

The company said that an Octaviar subsidiary had issued $100 million in unlisted bonds originally due to mature in 2011 and that the bondholders had commenced legal action in relation to these unlisted bonds in circumstances where the winding up applications brought by the Public Trustee of Queensland had triggered an event of default in relation to the unlisted bonds.

It said that a National Australia Bank demand for $40 million from Octaviar pursuant to a guarantee regarding the NAB Advance to the Living and Leisure Australia Group remained unsatisfied, but that Living and Leisure had recently announced further developments in the Arctic Capital proposal to recapitalise Living and Leisure and refinance its NAB debt.