OPI Pacific debenture holders no clearer about payment

Monday 22nd November 2010

Debenture holders of OPI Pacific Finance are no clearer about what they will recoup from the failed finance company after the third report from receiver Colin McLoy of PricewaterhouseCoopers.

The lender's complexity made it "extremely difficult" to estimate a return to secured debenture holders owed $198.4 million. The receiver has a claim worth A$418 million in the liquidation of Australian parent Octaviar, which agreed to cover losses relating to OPI Pacific loans under a put option.

In total, some 10,800 investors are owed about $256 million, though unsecured creditors are unlikely to get anything. McCloy said the firm, known as MFS Pacific Finance, is also unlikely to claw back anything from its $33.3 million loan book, or $20.9 million owed to subsidiary Opi Pacific Investment due to higher ranking creditors.

"Providing an estimated return to secured debenture holders may also jeopardise any actions currently being exercised by the receivers," McCloy said in his report. "An estimate of future dividends or the timing of dividends to secured debenture holders cannot be provided at this time."

OPI's trustee, Perpetual Trust, called in the receiver in September last year after a Queensland Supreme Court ruling put the parent company into liquidation.

The New Zealand lender convinced investors to let it put off its repayments to investors in May 2008, and had repaid 22.17 cents in the dollar to secured debenture holders before it was placed in receivership.

McCloy said he has passed on the findings of his initial investigation into OPI to the Securities Commission, Serious Fraud Office and Ministry of Economic Development.

BusinessDesk.co.nz

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