KEY POINTS:
The future ownership of the Stella Group remains up in the air as its troubled parent company MFS continues its discussions with interested parties.
Australian-listed MFS was due to come off a trading holt yesterday after a two-day break from the market but instead asked to be suspended to enable it to reach an agreement.
In a statement to the Australian stock exchange, MFS said it was in detailed discussions with a preferred party interested in acquiring a substantial interest in Stella and hoped to reach an agreement within the next two weeks. A number of other parties are also interested.
The troubled funds manager also clarified its debt position. According to the statement, the entire MFS Group has total debt of A$1.687 billion.
This includes A$1.055 billion in secured term debt, A$189 million in asset-backed facilities and A$443 million in unsecured notes.
MFS said A$220 million of the debt was due in under three months. Another A$119 million is due in one to three years.
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 had also decided not to continue with the structural separation of Stella from its financial services business.
Trading in the shares of Queensland-based MFS were suspended on Monday after it received unsolicited offers for Stella following its share slump on Friday.
MFS shares fell 70 per cent, wiping out over A$1 billion ($1.16 billion) in market value as investors fretted the firm was in financial distress after it unexpectedly announced a rights issue to raise A$550 million for its Stella tourism business as part of a separation plan.
The Stella Group owns a range of travel service and resort businesses across Australia and New Zealand including the Harvey World Travel Group in Australia and the New Zealand-based Gullivers Travel Group which it acquired last year when it bought Australian company S8.
S8 bought Gullivers in September 2006 for $235 million.
Meanwhile, dual listed stapled security MFS Living and Leisure (MPY), of which MFS owns 19.9 per cent, announced that it would also continue under a trading holt. In a statement to the market, the NZX said the halt had been put in place due to uncertainty concerning MFS and how that effects MFS Living and Leisure.
TOURIST TRAPS
Stella Group's New Zealand businesses:
* Gullivers Travel Group, which includes 74 franchised Holiday Shoppe travel agencies and 97 United Travel stores.
* Four Peppers hotels in Rotorua, Martinborough, Christchurch and Queenstown.
* Five Breakfree serviced apartment resorts in Queenstown.
* High View apartment complex in Queenstown.
- AGENCIES
