MFS Limited is fighting battles on several fronts, after it put out a fire by caving into the demands of major shareholder Chris Scott yesterday.
In a late announcement after the market closed on Monday, MFS announced that it is in dispute with James Packer’s Challenger Managed Investments and Queensland Public Trustee.
Challenger is looking to recover $100 million of unsecured notes, alleging a breach of the sub scri ption agreement in relation to the issue of Senior Unsecured Notes, which are due November 2011.
The company said it had tried to resolve disagreements through negotiation with Challenger during recent weeks.
“MFS strongly denies there has been any breach and will resist the claim vigorously,” the company said.
Meanwhile, the Queensland Public Trustee, as trustee for the listed unsecured MFSG Stapled Securities, has issued legal proceedings seeking information from MFS relating to its financial position.
The company said it had previously provided the trustee with information and has consistently stated that it is willing to provide the trustee with all reasonable information requested.
“MFS will comply with the court’s timetable for the production of documents and information to the trustee over the next two weeks,” the company said.
And after entering into a trading halt more than two months, it would seem shareholders will soon fight out the true state of the company’s financial position.
The Australian Securities and Investments Commission has decided not grant an extension of time for the lodgement of the company’s financial results for the six months ended December 31.
Meanwhile, MFS has reached a truce with major shareholder and former executive director Chris Scott yesterday.
To quell the uprising of Scott, MFS has invited Scott and his associates David Burke and Craig Chapman to become directors of the company.
It was only last week that MFS’ chairman Andrew Peacock fended off Scott, saying the bhe board does not support the resolutions proposed by Scott.
He had called for an extraordinary general meeting after publicly speaking out against the $1.3 billion two-thirds stake sale in the Stella Group to CVC Asia Pacific, arguing it undervalued the tourism and hospitality group.
But as a result of the new agreement, Scott has agreed to cancel the EGM called for April 07.
Yesterday, Scott’s adviser Jenny Hutson said the agreement to move forward together was in everybody’s best interests.
Hutson said she was confident the new directors would work well with the existing directors to ensure the MFS Board was focused on the best interests of both shareholders and the company.
The three new directors will be subject to re-election by shareholders at the next Annual General Meeting of MFS, expected to be held in November.
Finally, MFS said as trustees of the Blue Sky Development Trust, it has entered into exclusive negotiations for the sale of a number of Port Douglas assets.
The assets include the Sheraton Mirage Resort, Mirage Country Club and Golf Course, two development sites and the Balé resort.
Australian Property Journal
