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One year on Blue Star NZ bondholders will lose the lot

Tuesday, 21 August 2012
By Patrick Howard
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Investors in the New Zealand bonds (NZDX) of the troubled printing group are unlikely to see any return on their $105 million when the company is sold.

Blue Star applied to the New Zealand Stock Exchange to de-list the capital and Participating Bonds in order to protect the integrity of its current sales process. The bonds will be removed from public view on 28 August. The de-listing stops any requirement for NZX reporting and Blue Star releasing an annual report.

According to the company the bonds are now trading effectively at a nominal value, infrequently and on very low volumes. In a statement it said The Board now considers it unlikely that any value will attach to the Group’s NZDX listed bonds.

The delisting is the final act in a slow train wreck for the bondholders who last year voted to split their holdings into two lots – one that would not pay interest until 2013 and the remainder, $37.5 million, that would never pay interest. The deal was framed as either that or the company would go broke.

Under new CEO Phillip Bower, the group has hired Goldman Sachs to oversee a sale and likely break-up of the trans-Tasman printing enterprise. It is one of the largest companies in the industry with 13 production sites spread across Australia and NZ. The break-up process began with the sale of Rapid Labels last month to originator, Tom Sturgess.

CHAMP Private Equity will lose hundreds of millions of dollars from its ill-fated investment. The US-based fund bought the company for NZ385 million in December 2006 with the intention of floating it on the Stock Exchange. Sales estimates now range between $100 and $150 million.

 

 

 

 

One Response to “One year on Blue Star NZ bondholders will lose the lot”

  1. August 22, 2012 at 9:41 am,

    brian
    said:

    almost 4 years ago, Webstar had an opportunity to participate in rationalisation of the NZ heatset web printing market and were arrogantly dismissive, with Chris Mitchell believing he had a winning strategy in play. That strategy was clearly flawed on many levels and negatively impacted on many other business in NZ. Their belief that they could discout their way to success is naive at best. Setting up a plant in Auckland with a poor choice of equipment to suit a small volume from a single customer was indeed the first “slow train wreck” in play. Did Bluestar not know that replicating an Australian model would not necessarily mean success in NZ particularly given the situation that NZ paper consumption has plummeted from a much smaller industry base with overcapacity even in a good market.

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