Finance company MFS Pacific's parent MFS Limited is teetering on the edge of the precipice, according to Australian media.
The Gold Coast investment company has sought permission to delay its half-year results and has asked for a further reprieve from its commitment to honour the A$330 million ($385m)
in debts of its New Zealand subsidiary.
MFS Ltd has requested from Australia's corporate watchdog to delay its results until mid-March.
The saying "a late result will be a bad result" is likely to hold true for MFS, which hinted at massive writedowns.
"Material events over the past five weeks have led to difficulties in finalising the appropriate carrying values of tangible and intangible assets and determining other disclosures," it told the ASX.
The company is expected to write off A$80.5m of goodwill. It has also lent A$25m to the crippled fund MFS Alternative Asset Ltd, controlled by former MFS chief executive Michael King.
The Sydney Morning Herald said MFS's net tangible asset backing of A$3.09 per share was likely to be decimated.
MFS yesterday rebuffed an offer from its Brisbane rival, City Pacific, which wanted to take management control of its largest unlisted vehicle, the A$77m MFS Premium Income Fund.
City Pacific, which has also been hit by rumours it is under financial strain, said it "would not be in the best interests" for it to proceed".
MFS Pacific, which is also on a trading halt, yesterday pleaded with investors and shareholders for more time to sort things out with its 38 per cent owner, MFS Ltd.
MFS guaranteed MFS Pacific's debts under a put option when the New Zealand subsidiary listed last year.
Meanwhile, the unlisted New Zealand fund MFS Boston became the latest MFS fund to call for a stay on redemptions. It is the 16th New Zealand finance company to fail.
MFS Boston, which has $38.5m in investors' funds, proposed yesterday a "moratorium" from its 1700 unit holders. With a meeting called for March 14, the fund promised it could still repay investors in full plus interest.
- NZPA
