After a couple of weeks of speculation, Singapore-based private equity firm CVC Asia Pacific have purchased a 65% stake in the Stella group from the embattled MFS. The deal values Stella at around $1.5bn (over half a billion dollars less than the asking price 3 months ago, and about $400m less than it cost MFS to assemble the company.)

However, the deal does bring a degree of certainty back to Stella’s operations – which include the management of a number of Gold Coast resorts under the Mantra, Breakfree and Stella brands. Helped in no small part by the removal of over $900m worth of debts the company was holding. Exactly what effect this will have on Stella’s operations remains to be seen, however given the strong financial backing that CVC can provide, the outlook is certainly more positive than it was several weeks ago.

Over the past few days, embattled MFS Limited has made several moves towards paying off the $220m worth of short-term debt it must cover by March.

In addition to selling most of it’s 16.9% stake in MFS Diversified (it’s development arm which owns development company Villa World) and a 3.5% stake in Babcock & Brown Communities Group, MFS has also reported selling the Domain Aged Care Group to AMP for $93.5 million ($43.5 of which is profit). This is good news for shareholders, as it has dampened some of the ‘fire sale’ atmosphere that has been surrounding the group over the past few weeks.

Perhaps the most anticipated sale is that of a major stake in key asset Stella which is presently under negotiation. With Stella owning management rights to a large number of Gold Coast resorts and apartment buildings, this is probably the move being most keenly watched by Gold Coast property investors and building managers. At this stage, it is unknown when any official decision will be reached regarding the Stella sale, but given the short-term debt deadline, one suspects that it will have to be soon.

In addition to the fundraising, it is understood that from April 1st, MFS will have a new name – it’s moniker being given to Boston’s ‘Massachusetts Financial Services’. It is not known what the proposed new name will be.

Unsurprisingly, City Pacific have offically withdrawn their offer to purchase MFS’ financial services arm, in what has been a tumultuous few days for MFS. City Pacific have, however, requested to have first right of refusal for the financial services business.

The fallout from last week’s announcements and subsequent plunge in share price has also claimed the scalp of Chief Executive and co-founder Michael King. His post will be filled by his deputy, Craig White.

Trading in the company’s shares has been suspended since before the market opened yesterday morning with a company announcement expected tomorrow. This announcement is anticipated to include information related to, among other things, MFS’ Stella arm. At present, it is believe that there are two as-yet-undisclosed parties discussing taking a major stake in the resort, travel and leisure company. More news will be added as it comes to hand.

MFS is in dire straits, following a 68% plunge in it’s share price (from $3.19 to 99 cents) yesterday. This represents over $1.5 billion of value wiped from the company in a single day’s trading

The crash has been attributed to a number of factors, including the current US Sub-Prime mortgage crisis, and MFS’ recent announcement of interest in Centro’s troubled shopping centres. The major cause however is likely the recent plan to spin off Stella and MFS’ financial services arm under a restructuring plan which called for shareholders to contribute around $550 million. There was widespread market speculation that this move was simply an attempt by MFS to cover undisclosed bad debts.

The local repercussions will be interesting to say the least.  Through its Stella arm, MFS owns (among a slew of other things, including Harvey World Travel) management rights to a large number of Gold Coast resorts under the Breakfree and Mantra brands.  As a result of Friday’s trading there is speculation that management rights for a number of Gold Coast resorts will be up for sale on Monday for bargain prices. It is widely expected that MFS will be broken up, but exactly what form this separation takes is as yet unconfirmed. If a number of management rights are dumped on the market, it will have a coast-wide impact on management rights prices.

Gold Coast company City Pacific announced an offer to buy MFS’ financial services arm last Monday for around $1.3bn – one suspects that the offer will be withdrawn, given that MFS in its entirety is current valued in the vicinity of around $480 million. With a number of big projects currently in the pipeline, including the $100 million Paradise Sands development, it remains to be seen what impact MFS’ financial woes will have on the company.

There is little doubt that the Coast’s major players will be spending this weekend preparing themselves for what could be a very interesting Monday.