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MFS dumps name, director and calls for trading halt

The embattled ASX-listed MFS hit the headlines again yesterday after imposing a trading halt and revealing it was no longer able to use its own name.

Thursday, January 17th 2008, 6:49AM
Late last night MFS also revealed that non-executive director, Michael Hiscock, had resigned "effective immediately".

"Hiscock stated that he had submitted his resignation with regret and stressed that his resignation was due solely to personal circumstances," the ASX note said.

In response to Australian media reports, MFS revealed on Monday that Hiscock was forced to sell down 500,000 MFS shares on January 11 after a "financier" enforced a margin call.

In the earlier announcement to the ASX yesterday, MFS asked for a trading halt as it sought to split the travel business Stella out from its financial services assets.

According to the ASX announcement, the structural separation of the two strands of the MFS business would be achieved "via an entitlement issue to existing MFS shareholders".

The news came just days after MFS said it was considering a A$1.33 billion scrip and debt assumption offer for its financial services businesses from fellow Queensland-based listed entity City Pacific.

On Tuesday MFS also revealed it would change its name after becoming embroiled in an intellectual property lawsuit with the US-based international equities manager Massachusetts Financial Services Company.

In a statement to the ASX late on Tuesday, MFS said it would transfer the world rights to the use of its name to the US manager for a "confidential payment".

MFS said it has been developing a "new brand and corporate imagery" for its financial services businesses over the last nine months which it would launch "at an appropriate time".

The announcement came just after the Australian financial services website Investment and Technology News revealed the existence of the lawsuit.

According to the Investment and Technology report, the Boston-headquartered fund manager launched the trademark infringement action late last year against MFS Limited (formerly known as McLaughlins Financial Services), MFS Aqua and the New Zealand firm Boston Finance.

"The trademark infringement action was first filed in New York's Southern District Court last November, one month after MFS had changed the name of its New Zealand subsidiary, Boston Finance, to MFS Boston," the Investment and Technology story said.

Neither of the two NZX-listed MFS affiliates, MFS New Zealand Limited and MFS Living and Leisure, have made any announcements concerning the possible effects of the name change or the City Pacific takeover offer on the New Zealand businesses.

MFS owns 38% of MFS New Zealand, however, it retains full ownership of MFS Boston and the financial advisory group Vestar.

Late in December MFS New Zealand revealed it had extended its option to buy Vestar and MFS Boston from the Australian entity. The Australian group also said it would continue to back any debenture payments due for its New Zealand subsidiaries if necessary.

As well, MFS told the ASX on Monday it had A$150 million of debt due for refinancing this year which and was "confident of its ability to repay same on or before the due date".

"MFS intends to repay the debt from the successful execution of a number of asset monetisation transactions already in train or alternatively MFS is well progressed on a number of other debt and quasi debt options to repay such debt," the MFS announcement said.

MFS shares closed down almost 20% yesterday to A$3.18 after jumping close to 11% the previous day.

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  • a2: could the milk be starting to turn?
    “Great Fundemental look.I guess in the ASX50 . as long as Aussies still love buying the Dip..its no worries Graeme Adams...”
    20 hours ago by Graeme33
  • It starts with governance
    “Hi David and thanks for your words also. I did read the FMA stuff before the post and also in my first response mention...”
    22 hours ago by gavin austin adviser business compliance
  • AMP reports profit drop amid 'solid' result
    “Sadly, AMP is becoming less and less relevant. Apart from this tiny blip of positive cash inflow, they've been bleeding clients...”
    23 hours ago by Contrarian
  • It starts with governance
    “Good words Gavin - might also mention the FMA publication -”
    23 hours ago by dcwhyte
  • It starts with governance
    “adviser1 - go talk to Partners Life. they have a great tool to help with this sort of stuff. ...”
    1 day ago by Tash
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