Octaviar receives payment demand on A$348.62 million notes, A$40 million loan guarantee

By Caroline Salls

Pittsburgh, May 27 - Octaviar Ltd. received a notice of default and acceleration on its notes due Dec. 30, 2011 from the Public Trust of Queensland and a demand for payment in connection with a A$40 million guarantee made to the National Australia Bank, according to a creditor and business update.

Under the acceleration notice, the A$348.62 million principal amount and A$2.84 million of interest accrued through June 4 will be due on June 5.

Octaviar said it is considering the effect of the acceleration notice and hopes to be ready to hold discussions with the PTQ shortly.

Also, Octaviar said the $40 million NAB guarantee was made to support a loan for the Living and Leisure Australia Group.

The company said the Living and Leisure Australia Group has announced a recapitalization proposal that includes the refinancing or repayment of the NAB loan.

Octaviar said the proposal has a number of preconditions. While recapitalization discussions are ongoing, the company said the statutory demand has not been resolved.

In addition, Octaviar said it needs to reach an accommodation with its larger unsecured creditors to allow the company's investment in the Stella Group to occur within the same timeframe as creditor payment deadlines.

Additionally, the company said the holders of debentures and unsecured notes issued by OPI Pacific Finance Ltd. voted overwhelmingly in favor of a moratorium proposal intended to allow OPI Pacific to work with Octaviar over the next three years on a managed work out of its loan book.

The moratorium proposal requires Octaviar's large unsecured creditors to enter into a formal arrangement.

Octaviar said it has a significant exposure to New Zealand Associate OPI Pacific.

Finally, Octaviar also said Challenger Managed Investments Ltd., which manages funds that hold $100 million in bonds due November 2011 issued by one of Octaviar's subsidiaries, has asserted a trigger event that would give Challenger the right to accelerate payment on those bonds.

According to the update, Challenger has filed a lawsuit in connection with the alleged trigger event. A trial is scheduled for July 21.

Octaviar is a Queensland, Australia-based investment management business.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.