KEY POINTS:
Troubled OPI Pacific Finance has made a damages claim for about A$270 million ($344 million) against Queensland-based Octaviar and one of that company's subsidiaries.
Previously named MFS, investment manager Octaviar owns 38.5 per cent of OPI New Zealand, formerly MFS NZ, which owns OPI Pacific Finance.
Last month
debenture holders in OPI Pacific Finance, formerly MFS Pacific Finance, voted for a moratorium arrangement.
That came after OPI Pacific Finance was forced to default on repayments in late January when Octaviar declined to provide further support because of its own difficult financial position.
Octaviar told the Australian stock exchange yesterday of the OPI Pacific Finance claim, which it had been advised of last Thursday.
Provision was made in Octaviar's financial statements at the end of December for an obligation of A$246m to OPI Pacific Finance under a put option. An initial amount of A$20m was paid in March.
The claim for damages from Octaviar is related to the parent company's management of the OPI Pacific Finance loan book, The Dominion Post reported today.
An OPI Pacific Finance spokesman said it was believed Octaviar had breached the terms of its management contract, resulting in losses for OPI Pacific Finance.
The Australian newspaper said Octaviar's situation has worsened dramatically with the OPI Pacific Finance claim and another for A$147.5m from the Premium Income Fund.
If successful, the claims would bring the debt of Octaviar to more than A$1 billion.
Meanwhile, the Public Trustee of Queensland's bid to wind up Octaviar over A$349 million in unsecured notes has been put off until September. The matter previously was listed for hearing next month.
This means the first court action facing Octaviar is that of James Packer's Challenger Group over its A$100 million in unlisted floating rate bonds.
Challenger Managed Investments is seeking to clarify guarantees Octaviar provided and the terms of the agreement over the bonds. That court hearing has been set down for July 21.
At the end of March OPI Pacific Finance owed $274m to secured debenture stockholders and $56.7m to unsecured noteholders.
It said that of $476m in cash, loans and investments, only $122m may be recoverable.
Without financial support from Octaviar, secured debenture holders would recover less than half the amount of their principal and accrued interest, OPI Pacific Finance said last month. Unsecured noteholders would get no principal or interest.
- NZPA
