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Opus to exit ASX in expansion plan 

Wednesday, 20 June 2018
By Graham Osborne
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CanPrint’s facility at Nyrang Street, Fyshwick, ACT.

The Hong Kong owners of ASX-listed Opus Group – which includes Australian printers Ligare, CanPrint and McPherson’s – have laid out a radical business restructure proposal to delist from the Australian Stock Exchange, ‘re-domicile’ the company from Australia to tax haven Bermuda and apply for a listing on the Stock Exchange of Hong Kong.

The plan, revealed in an announcement to the ASX, includes the expansion of its existing Australian printing businesses.

Opus Group Limited has entered into a Scheme Implementation Agreement under which it is proposed that Opus will re-domicile from Australia to Bermuda and list on the Main Board of the Stock Exchange of Hong Kong.

 The re-domiciliation is proposed to be implemented by a scheme of arrangement under which Opus shareholders will exchange their securities in Opus for securities in a newly incorporated Bermudan entity, Left Field Printing Group Limited (TopCo) on the basis of three TopCo shares for every one Opus share. Once the listing approval from the HKEx has become unconditional, TopCo will list on the HKEx and Opus will be delisted from the Australian Securities Exchange (ASX).

‘We are planning for an expansion’: Opus chairman Richard Celarc.

The board of Opus has recommended that all Opus shareholders vote in favour of the scheme and declared a special dividend of 13 cents per share. Shareholders can receive the dividend in the form of Opus shares or cash.

“Our business objective is to retain our position as a leading one stop print and services provider in Australia, including end-to-end printing solutions and services,” Opus executive chairman Richard Celarc told Print21. “We will continue to maintain investment in key machinery and equipment to enhance our production capabilities, expand and streamline our printing and warehousing facilities; and grow our business strategically through merger, acquisition and business collaborations.

“We are planning for an expansion and streamlining of our printing and warehousing facilities in CanPrint, which will enable us to provide end-to-end printing solutions and services to our customers.  We are also planning to increase our production capacity and efficiency by purchasing suitable machinery, including digital print presses and binding machines.”

Celarc says the ‘re-domicile’ scheme will allow shareholders to take advantage of higher market liquidity, increased trading and investment activities and expected uplift in the company’s market capitalisation, as well as increasing the ability to attract strategic investors and improve fiscal efficiencies.

In its application to the HKEx, the Opus board provided an overview of the business and outlined plans for the expansion of its local printing operations.

Our printed products include read-for-pleasure books, government printed matters, quick turnaround time education books and catalogues, operating manuals and promotional leaflets. According to the Frost & Sullivan Report, in terms of revenue generated in 2017, we are the largest government segment printing services provider within the large commercial printing industry in Australia (ranking fifth largest in the overall commercial printing sector in Australia) and the largest printing services provider in the book printing industry in Australia.

 The size of the commercial printing industry for enterprises and government segments as well as the book printing market in Australia is expected to continue to grow, which will continue to benefit or group’s future prospects.

Ligare book printing and publishing, Sydney.

 For each of the last three years, the company’s revenue was $80.7 million, $87 million and $79.2 million and profit after tax was $7.2 million, $5.5 million and $5.7 million. Ligare, CanPrint and McPherson’s were equipped with 17 major printing presses and binding machines as at 31 March 2018 and more are on the way. 

We schedule to purchase additional machinery in order to expand our production capacity. Such purchases will include one additional new digital printing press and three binding machines. We also propose to purchase replacement machinery in order to enhance our efficiency including three digital printing presses, two binding machines and one pre-press machine…we also propose to purchase additional warehousing equipment to cope with our expansion in production capacity…the total expenditure to purchase such machinery and equipment is estimated to be approximately [redacted].

The company also floated the possibility of relocating its government printing specialist CanPrint.

The current set up and arrangement of our machinery and equipment within our production facilities may not be organised in a manner which allows us to operate at an optimum level of efficiency and effectiveness…management would consider a potential relocation or reorganisation of our CanPrint facility under a single production and warehousing facility to accommodate the expected expansion of capacity and streamline our business.

Opus shareholders are expected to vote on the scheme in early September 2018. If they agree with the plan – and if the company receives listing approval from the HKEx – Opus Group will be re-domiciled to Bermuda, TopCo will list on the HKEx and Opus will be delisted from the ASX within the fourth quarter of 2018.

update:

Celarc emphasised that the printing businesses of Ligare, CanPrint and McPherson’s will continue to be proud local employers providing Australian made products and services and meeting all Australian regulatory requirements and obligations. 

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5 Responses to “Opus to exit ASX in expansion plan ”

  1. June 20, 2018 at 1:27 pm,

    Fairgo
    said:

    Oh come on, haven’t we had enough of these shenanigans? It is tax avoidance tooth and claw and if the ASX and Australian government allow this they should hang their heads in shame. The PIAA must take this up and fight it to the death otherwise non-Bermudan tax-paying printing companies who actually contribute to the Australian economy will be at a serious disadvantage. If google and facebook can be made to pay avoided tax, so can Opus and their Hong Kong majority owners. Note: “we are the largest government segment printing services provider within the large commercial printing industry in Australia” – why should ‘the government’ continue to allow this to continue when they (TopCo) plan to rip us all off? It’s disgusting.

  2. June 20, 2018 at 1:58 pm,

    said:

    I’m with Fairgo. This is nothing but a tax dodge that will disadvantage genuine tax paying Australian printers. If the Government lets this go ahead they MUST immediately pull all contracts with CanPrint otherwise they will be aiding and abetting the destruction of our tax base and our printing industry.

  3. June 20, 2018 at 2:06 pm,

    Banksy
    said:

    The Prime Minister keeps his money in the Caymans, so I’m not sure if he’s going to worry too much about handing all his printing to a company domiciled in Bermuda.

  4. June 20, 2018 at 3:41 pm,

    Andy McCourt
    said:

    In the interest of truth and accuracy Banksy, the Turnbulls divested those investments in January 2017. They were ‘hands-off’ fund investments anyway where they parked some cash and the fund was registered in the Caribbean tax haven. He made most of his pile with Ozemail anyway. He pays tax here – guaranteed.
    To Opus – this is very disappointing news and I am surprised that Richard is going along with it. It would hardly be surprising that Opus could afford major equipment upgrades if they weren’t paying Australian taxes in the way that IVE, PMP and the non- ASX listed industry participants do. HKSE listings with Cayman/Bermuda/BVI headquarters are notoriously flakey and many have been cracked down on with allegations of money laundering as well as tax avoidance. One former CEO of a suspended HKSE listed company I know of resides in Stanley Prison, HK, right now.
    It may be that the relocation of listing can not be prevented but, for sure our government should not patronise tax-avoiding, tax-haven domiciled printers with any contracts or tenders whatsoever. There is also the security aspect to consider, having confidential reports, budget papers etc printed by foreign tax-avoiders. Just sayin’.

  5. June 20, 2018 at 4:14 pm,

    Fairgo
    said:

    Check out Lion Rock Group, listed on HKSE, headquartered in Bermuda. Formerly 1010 Printing, they own most of the shares in Opus. Richard Celarc is a director, read his bio:
    https://www.reuters.com/finance/stocks/company-officers/1127.HK

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