The fate of future payments to investors in troubled finance company OPI Pacific Finance may be hanging in the balance as its Australian parent Octaviar faces a court wind-up order from the Public Trustee of Queensland.
Pacific Finance entered into a three-year moratorium on May 19 in abid to allow Octaviar time to sell off its assets and meet a put option agreement to pay the overdue debt of the finance company.
Around 12,000 investors have over $300 million tied up in Pacific Finance, which initially defaulted on interest payments in January.
But on Thursday Octaviar, previously known as MFS, confirmed the Public Trustee of Queensland had backed up its demand for the repayment of A$351 million of debt with a court order in the Supreme Court of Queensland.
Last week, PTQ, representing investors in listed notes of Octaviar, served the fund manager with a notice saying a default had occurred and was demanding the repayment of A$351.5 million, including interest, by June 5.
"OIN (Octaviar Listed Notes Ltd) denies that the notice is valid," Octaviar said in a statement.
"Attempts to arrange discussions with the PTQ regarding their notice of 23 May 2008 have not yet been successful."
Winding up orders have been filed on Octaviar, Octaviar Investment Notes, Octaviar Investment Bonds and Octaviar Financial Services.
Octaviar said it was considering the applications and hoped to discuss the applications with the PTQ before any court hearing.
Separately, Octaviar said it had reached no resolution in its discussions with Challenger Managed Investments.
Challenger, which is managing bonds issued by Octaviar with a face value of A$100 million, has commenced legal action against the fund manager, asserting that the occurrence of a trigger event made the notes payable.
The bonds are due in November 2011 and Octaviar paid the interest outstanding due on May 23.
Octaviar said National Australia Bank's demand for repayment of a A$40 million debt also remained unsatisfied.
Octaviar is the cornerstone shareholder in OPI Pacific Finance, formerly MFS Pacific Finance, in New Zealand.
Octaviar shares last traded at A99c before they were suspended in January.
