ACCESS OWNERS BUY BUSINESS BACK FOR $5M
The owners of failed $18m commercial operations Access Print, Graphic Print and Graphic Web have bought the businesses back from the administrator, for $5m, plus employee accruals.
The move by owners Mark Holmes and Norbert D’Souza has caused angst in the print communities of Sydney and Adelaide, and prompted calls for industry suppliers to consider the impact of them working with the new entity, named Access Print Holdings.
The administrator, Sule Arnautovic of Salea Advisory, is now recommending that the three companies be liquidated. He says that it is likely that only priority unsecured creditors of Graphic Web and Access Print will receive any ‘dividend’, meaning that their non-priority unsecured creditors, and all unsecured creditors of the largest company, Graphic Print, may receive zero cents in the dollar.
Speaking on condition of anonymity to Print21 one local printer said, “The rest of us have to trade with all our costs, these guys have been able to shed a lot of debt, it’s just not right.” Other printers talking to Print21 were expressing the same sentiments, but using less polite terms.
The $5m paid by Access Print Holdings will be used to pay outstanding payroll costs, trading liabilities, and professional costs accrued during the administration period. If anything is left creditors of the three companies will receive a dividend.
Between them the three businesses, Access based in Sydney, Graphic Print and Graphic Web in Adelaide, had sales of some $18m.
They were put into administration on 19 June, the day before Director Penalty Notices (DPNs) from the ATO were due to expire. Additional DPNs had already expired, meaning the directors were made personally liable for a significant portion of the tax owed to the ATO.
The new company, Access Print Holdings, was registered one week later. Access Print Holdings bought the business back from the administrator two weeks after that, which was three weeks after the directors put it into administration.
Access Print Holdings paid $4m for Access Print, $480,000 for Graphic Print, and $523,000 for Graphic Web.
The new entity has offered all staff their jobs back, and said they will be paid for the entire period of administration. Staff that decline to take up their offered jobs with the new company will go onto the priority creditors list. The three companies have 75 staff between them, the bulk of them, 46 at Graphic Print, with 19 at Access, and 11 at Graphic Web.
The second creditors’ meeting for Access Print, Graphic Print and Graphic Web is slated for next Wednesday 24 July, but is likely to be postponed for 45 days, with the administrator wanting more time, and to work out how much if anything the creditors will receive. He is recommending liquidation.
The directors of the companies cited poor economic trading conditions, a significant cost expenditure with respect to various premises leases, and outstanding statutory taxation obligations as the reasons for they placed the companies into administration.
The administrator said that while not disputing the directors’ reasons for the companies' downfall, his appointment was a result of “under capitalisation, poor books and records, and insufficient cash flow resources being available”. No financials have been completed by the companies for the past two financial years.
Access was established by Holmes and D’Souza 20 years ago, and bought Graphic Print in 2015. Graphic Web was Wayne Sidwell’s Cadillac Printing, which Access bought in 2016, and it is the only company apart from TMA and IVE to run a heatset web in Australia. Access and Graphic Print run B1 presses, including a stacked five-over-five Komori at Graphic Print.