Friday 1st of February 2008

What is happening at MFS in New Zealand? Is it the end of the line? Yesterday the company had its shares suspended from trading on the NZX and it appears that the company has gone into lock down mode. We know advertising has been pulled and it is unclear whether the company is accepting money. From what I hear it needs to. The story we hear is that Vestar placed a reasonable sum of clients’ money into 30-day debentures with MFS Pacific and rolled these over each month. However, yesterday Vestar told MFS Pacific it wasn’t rolling over the investments at the start of February, therefore MFS Pacific had to redeem the debentures. Trouble is there is no money in kitty and its request to its Australian parent, which also has its shares suspended from trading, was given a firm no. That’s not a surprise as it is currently trying to sell assets to sort out debt issues. If this version of events is correct it raises the odd situation that the combined businesses are shooting themselves in the collective foot as Vestar is owned by MFS in Australia. Personally I hope MFS doesn’t follow other finance companies into collapse as it had some good plans for New Zealand and it appeared to have been run much better than some of the dodgy crowds which collapsed. This is the version of the story we have heard – if you can shed any more light on the matter please let me know.