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Breakthrough in Spicers deadlock

Friday, 16 June 2017
By Graham Osborne

Separate meetings of Spicers shareholders and its SPS Trust hybrid unitholders have voted overwhelmingly in favour of a deal to break the deadlock with the hybrid shareholders and restore the paper merchant’s capital structure.

ASX-listed Spicers (formerly PaperlinX) suspended trading of its shares on Wednesday as both groups of shareholders met in Sydney to vote on a plan agreed to in December 2016 by Spicers and the Trust Company – the responsible entity for the PaperlinX SPS Trust.

The agreement will see hybrid shareholders take a 68.3% percent stake in the company, with chairman Robert Kaye and non-executive director Michael Barker agreeing to step down and three new directors to be appointed.

“Both shareholder meetings were very short and both groups approved the implementation agreement with an overwhelming majority. There were no issues,” says a spokesperson.

The trading suspension on Spicers shares has been lifted and the proposal will go before the Supreme Court of NSW next week for final approval. Trading of the new Spicers shares could then begin as early as 28 June.

'Extremely pleased': Wayne Johnston, finance director and CFO, Spicers

“The Spicers Board and management are extremely pleased with the outcome of the general meetings,” says Wayne Johnston, Spicers’ finance director and CFO. “The results of the meetings confirmed overwhelming support from both the Spicers ordinary shareholders and the SPS Trust unitholders for the proposal and we thank them for this.

“We now look forward to receiving final approval for the Trust Scheme to proceed at a Supreme Court of NSW hearing scheduled for Tuesday 20 June. Assuming this is received, Spicers expects the Trust Scheme to be implemented prior to 30 June 2017, enabling us to now move forward with a unified and simplified capital structure.”

Before the voting, outgoing Spicers chairman Kaye told the ASX the company’s “complex capital structure has restricted Spicers’ ability to undertake corporate activities that many listed companies would take for granted.

“Legacy conflicts between respective sets of security holders restrict Spicers’ ability to raise capital, pay dividends and for the market to determine the true value of the business. This in turn significantly limits Spicers’ commercial and financial options.”

“Now is the right time for such a proposal, following: withdrawal from European operations in 2015; a return to overall profitability in FY 2016; the appointment of a new CEO [David Martin] in July 2016.

“Capital structure simplification would put Spicers on a more sound and sustainable footing for the future, broadening investor interest, enhancing trading liquidity in Spicers shares and may assist in improving Spicers’ equity market valuation.”

PaperlinX began trading under the Spicers name following the collapse of its European operations in 2015.

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