MFS in detailed talks over Stella stake sale
A report by news.com.au says that MFS is in detailed discussions with a preferred party interested in buying a large stake in its Stella tourism business.
The troubled funds manager has also clarified its debt position.
According to announcement made to the Australian stock exchange by MFS, the entire MFS Group has total debt of $1.687 billion.
This includes $1.06 billion in secured term debt, $189 million in asset-backed facilities and $443 million in unsecured notes.
MFS said $220 million of the debt was due in under three months.
Another $119 million is due in one to three years.
“MFS is presently in detailed discussions with a preferred party interested in acquiring a substantial interest in Stella,” the group said.
MFS said it is aiming to reach an agreement with either that part or another party within the next two weeks.
The firm said the proceeds of any transaction would result in the full payment of all short term maturing debt.
“At this stage, the proposals received are conditional on limited further due diligence and satisfaction of any necessary regulatory approvals.”
MFS said it has also decided not to continue with the structural separation of Stella from its financial services business.
MFS has requested that its shares be voluntarily suspended from trading on the stock exchange.
Shares in MFS plunged almost 70 per cent on Friday after the company announced it wanted to split its tourism and funds management arms. It also said it wanted to raise $550 million through a rights issue to reduce debt.
Securities in MFS Diversified Group fell sharply today after it released an announcement clarifying its relationship with MFS Ltd.
MFS holds a 16.9 per cent stake in the fund, the announcement said.
MFS Diversified Group shares fell 11 cents, or 15.71 per cent, to 59 cents by 11.12am AEDT.
Another entity related to MFS, MFS Living & Leisure Group, has been placed in a trading halt.
Report by The Mole from news.com.au
John Alwyn-Jones
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