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Paper merchants hold key to Picton

Monday, 05 November 2018
By Wayne Robinson

Paper: possible Picton problem

The chance of Picton Press remaining operational if a DOCA gets off the ground remains uncertain, with the decision likely ending in the hands of the paper merchants.

Picton directors Garry Kennedy and Dennis Hague are aiming to gain back control of the business, with the plan to move the $2.25m unsecured creditors’ debt into a creditors’ trust, which will see the major unsecured creditors, those owed more than $10,000, receive about 15c in the dollar.

However the proposed plan has left Perth’s other major printers furious, as the move will essentially eliminate almost $2m of Picton’s $2.25m unsecured debt, and allow Picton to compete again without most of its debt.

The other printers are already complaining that Picton has been seriously undercutting them for the past three or four years.

One of the major paper merchants is the second biggest unsecured creditor of Picton, to the tune of several hundred thousand dollars, although it is fully insured.

Neither of the country’s major paper merchants Ball & Doggett or Spicers would want to risk the ire of the other half dozen major Perth printers. Spicers managing director David Martin has consistently said he will not supply to anyone who he is not able to get insurance for.

Those WA printers are certain to be having strong words with both the national suppliers and with the local merchants. They will be inspired by the Geon events of five years ago, when US hedge fund KKR took over the collapsed business and told paper merchants they would get COD, only for Stephen Anstice, then running IPMG, to reputedly to turn round and tell the merchants that if they supplied to Geon he would never buy from them again, with many other printers in the country getting in lockstep straight behind him. By the end of the week Geon was dust.

There are three smaller merchants in WA, but they too would have to look at the risk of getting permanently offside with the other major printers carefully. Picton could buy direct from Indonesia or China, but that would likely be too risky and would not give them the range a commercial printer needs.

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