Management buy in for WC Penfold

Under the arrangement the company’s 27.1% interest in Australia’s larges dedicated sheetfed printing company, the publicly listed, Penfold Buscombe, is to be distributed to the existing shareholders while the newcomers will eventually get 72% of WC Penfold.

The newcomers are turnaround investor Helmsman Capital Fund and a management buy in (MBI) team, Ivan Hodges and Stephen Brennan. Hodges was formerly CEO of Blue Star Office Supplies (Australia) while Brennan is a partner of Duesburys Chartered Accountants.

The deal comes after years of consolidation and change in the stationery and office supply market that has seen giants such as Office Works and Corporate Express radically alter the sector. WC Penfold has struggled to adapt to the new business environment.

Commenting on the proposals, the executive chairman of WC Penfold, William Penfold, said: “The combination of Helmsman, the MBI team and WC Penfold as the pre-eminent stationery and office products brand name in Australia, provides a solid platform from which to rebuild the Company and restore profitability and long term shareholder value.”

The $5.5 million will see $2 million used to retire primary debt with the balance to meet the working and expansion capital requirements of the company.

In a statement the company said, that due to difficult trading conditions and working capital constraints, WC Penfold continues to incur trading losses. ‘As a result, the board is currently assessing the carrying values of its assets and, if appropriate, will make a further announcement.

‘The board believes it is unlikely that the Company will return to profitability in the foreseeable future in the absence of the proposed recapitalisation or an alternative proposal.’