MFS mfs limited

mfs staff cull begins

  1. 11,407 Posts.
    February 29, 2008 06:50am

    MFS staff cull begins
    Nick Nichols


    THE cruel cull has begun at MFS, which plans to cut a large swathe through its staff numbers as it continues to fight for survival and prepares for life under a new moniker.

    The embattled Gold Coast funds manager last night announced it was looking to slash its staff of 250 to reduce costs.

    MFS has not detailed the number of jobs affected, but it is understood about 100 staff will be shown the door at the end of next week.

    The news comes as sources close to MFS have revealed the company could announce as early as today that it had settled the sale of 65 per cent of tourism and travel business Stella.

    The Stella stake, being bought by private equity group CVC Asia Pacific, will put $409 million cash into MFS's bank account, allowing it to pay off short-term debt of $155 million.

    The deal was not expected to settle until the end of next month, but the move comes amid rumours that an offshore party also may be interested in taking an equity stake in MFS.

    MFS has been forced into staff redundancies as part of its strategic review being conducted under the direction of insolvency specialist Korda Mentha subsidiary 333 Capital.

    "Although the strategic review is incomplete, it has become clear that the future structure and direction of MFS will not sustain the current staffing level," said MFS chief executive Craig White in a statement to the stock exchange yesterday. "I wish to thank all staff for their hard work and contribution, in particular during our recent difficulties."

    Last night's announcement also called for an extraordinary general meeting of shareholders on March 28 to vote on a new name for the company: Octaviar Ltd.

    The name change is part of an agreement struck in January with Boston-based Massachusetts Financial Services, also known as MFS.

    Massachusetts Financial Services is paying MFS Ltd an undisclosed sum for the rights to the MFS acronym in the Australian market.

    The new name also distances the company from its controversial past.

    The new look MFS is expected to be a severely trimmed down version of its former self.

    The March 28 meeting, to be held in Melbourne, would also allow shareholders the first opportunity to get up close and personal with MFS board since the company's devastating share fall on January 18.

    The company is also likely to have completed its strategic review by then, giving investors a clearer picture on the fate of their frozen funds.

    MFS shares have been suspended since the middle of January, while shareholders in its flagship premium Income Fund are unable to withdraw their investments until August.

    A similar scenario has been played out in New Zealand, where two MFS funds are seeking a moratorium on payouts, while MFS New Zealand's shares also remain suspended from trading.
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.