Octaviar boss says accept deal or he'll liquidate

THE chief executive of embattled property group Octaviar has thrown down the gauntlet to creditors owed more than $1 billion by threatening to place the crumbling empire in liquidation if they do not support a payout of 22.5? in the dollar.

THE chief executive of embattled property group Octaviar has thrown down the gauntlet to creditors owed more than $1 billion by threatening to place the crumbling empire in liquidation if they do not support a payout of 22.5? in the dollar.

Octaviar boss Chris Scott said the company's creditors, who include noteholders, investors in unlisted managed funds and the Australian Taxation Office, would be better served by allowing Octaviar to trade its way out of its troubles."

For months and months we have said that the worst option is liquidation, and I've always said that professional investors are rational. Now, this is going to test that theory," he said.

Yesterday Octaviar said it had sent a letter to its 560 noteholders asking them to vote on a payout that would see them either accept an immediate cash payment in exchange for their notes, remain a noteholder until June 2011 and enjoy the benefits of security over available group assets or a combination of the two.

If they accept the cash offer, noteholders will receive $100 for each of their first 50 notes and $22.50 for any additional notes.

The proposal contemplates that 200 of all the noteholders would receive an immediate cash payment for the full face of their notes. Noteholders have been sent a lengthy document and have been asked to respond by August 11."

This document shows that the worst option is in fact liquidation and we are providing an alternative which is a better option that liquidation," Mr Scott said.

He added that this payment formula also would be offered to all outstanding creditors in a take-it-or-leave it proposal to rescue the company from complete collapse."

We are going to make this offer to all creditors, not just the noteholders, so that includes the Premium Income Fund . . .

to Pacific Finance in New Zealand, the ATO and to the bondholder, which is Challenger," he said.

He said if successful, the offer could erase $600 million in debt."

If you don't like either then don't accept the offer and we will go into liquidation . the whole company, the whole of Octaviar will go into receivership . because we roughly owe people $1 billion and only have $400 million with which to pay them," he said."

I think it's a brilliant offer because if we go into liquidation across the board, the average they (creditors) will get on best analysis is 13.9? in the dollar."


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