Symex turns a new leaf as Pental – Australian Financial Review
Tuesday, 8th January 2013
PUBLISHED: 07 JAN 2013 19:12:15 | UPDATED: 08 JAN 2013 00:32:52
Troubled Symex Holdings has been given a second chance under a fresh name and a new capital structure.
Sales and marketing group Sales Link has emerged as a cornerstone investor in the consumer products company, while lender ANZ Banking Group has written off $10 million in bad debt.
Symex, now called Pental, owns well-known supermarket brands including White King bleach which it bought for nearly $50 million in 2011. It is the largest manufacturer of soap in Australia, and also owns Sunlight and Huggie fabric softener. It also owns Jiffy firelighters.
Up until six months ago Symex was primarily a chemicals manufacturer, suspend from trade after failing to repay a loan to ANZ. Only one of three business units was profitable. Its Oleo chemical business, which made plastics and personal care items was not viable, hurt by the rising Australian dollar.
The company posted a net loss of $60.67 million in fiscal 2012 with total debt ballooning to more than $60 million over four times its market capitalisation. Adviser M&A Partners led a restructure, including a one for seven renounceable rights issue, which raised $19.3 million at 1.5 a share. There was also a short dated loyalty option a one for four issue priced at 2 each.
Existing shareholders Allan Grey and Victorian auto dealership investor Alan Johnstone tipped in additional funds, ending up with 17 per cent and 19 per cent stakes respectively.
Sales Link emerged with a 17 per cent stake after pumping in $3.7 million. It also entered sales agreements to provide retail marketing services to Pental.
New Pental chief executive Alan Fisher has sold non-core assets, closed under performing businesses and reached a deed of forgiveness with ANZ bank in recent months. Last year the company sold a large parcel of land behind the Port Melbourne football ground for $25 million with funds used to repay debt.
When successful business are overly leveraged with costly legacy issues it’s in the best interests of the market and shareholders to address the problems head on and vigorously pursue restructuring strategies despite the market climate, Mr Fisher said.
Earnings before interest, tax, and amortisation are expected to reach $10 million this financial year. By June 30 debt is tipped to be reduced to about $25 million from $65 million at its peak.
The deal would not have moved ahead without ANZ forgiving about $10 million in debt.
Writing off $10 million, it protected the rest of the debt, and if they didn’t do that they may have lost a lot more, said one source.