Tuesday, 2nd April 2013
PPI sale raises $18m, saves 170 jobs
EDITED BY SARAH THOMPSON AND ANTHONY MACDONALD
PPI Corporation the failed Brisbane pipe and irrigation products manufacturer that was previously majority-owned by the private equity arm of Lazard has been sold by the administrators for roughly $18 million.
Under the deal, privately backed The Lansell Group snapped up the Neta Garden Products business and associated wholesale and irrigation businesses.
PVC pipemaker and supplier David Moss Group purchased the balance of the business which included the mining, infrastructure and construction operations. The pair worked together on their bids but there is no common ownership.
The sale saved about 170 jobs out of a total staff of 275 and the proceeds provided sufficient funds to pay in full all outstanding entitlements to employees that would not transfer with the business.
The return to unsecured creditors would be about 25 in the dollar. There was not expected to be any return to equity holders. Secured lender GE Commercial will get back in full its $10 million exposure.
According to its website,PPI has annual revenue of more that $100 million. Established in 1979, PPI was forced into voluntary administration in January after a suffering a cash flow squeeze, with 65 per cent of its revenue coming from the mining and infrastructure area which was affected by projects being delayed or not going ahead at all.
PPI has offices in Brisbane, Perth, Adelaide, Melbourne, Townsville, Sydney and Hobart, as well as a factory and sales office in Christchurch, New Zealand.
Lazard initially invested in PPI in 2007, taking a 30 per cent stake. It later invested in tranches, taking its holding to 68 per cent.
PPB Advisory was appointed voluntary administrator in January.
Lansell was advised by M&A Partners while David Moss Group took legal advice from DibbsBarker.