Paragon owner PMG takes stake in Moore parent Argus

Argus Solutions, which is the parent entity for print management company Moore Australasia, announced that PMG had agreed to convert a $3.85m debt into 55 million ordinary shares at a price of 7c per share over the next four months.

The deal, which has been recommended by the Argus board but remains subject to shareholder approval, would give PMG a 44% stake by 30 November 2010.

The move will shore up Argus’ financial position following a difficult start to the year, when former Moore entity and major supplier Paragon Printing entered a prolonged and high-profile administration.

Argus chief executive David Glavonjic told ProPrint: “What it means is that the company is able to move forward with confidence now that it’s got its financial position under control.

“It’s no secret that the Paragon administration impacted us and our customers pretty significantly and had quite a negative impact on our cashflow. But this is a tremendous signal that there’s support from the market place. From a personal point of view, it’s been gratifying to have so much support from our customers through what has been a difficult patch.”

Glavonjic added that he saw the investment as a strong endorsement for Argus.

“[PMG managing director Leo] Moio is quite a well-known and highly regarded industry figure, so it’s quite a vote of confidence from him that he’s prepared to convert his debt into equity.”

Moio is an independent director on the Argus board.

PMG general manager of sales and marketing Lisa Stark told ProPrint that the company had no qualms about taking a stake in Argus, despite its recent hardships.

“We’re not in the habit of throwing good money after bad. Leo has a strong and successful history of being involved in companies in this industry,” she said.

“He’s done extremely well with acquisitions in the past,” added Stark.

Glavonjic said he didn’t expect the changes to have “any significant impact on the day-to-day operations” of Argus.

Argus has also released results, which showed a $1m pre-tax loss for the company in the three months up to 30 June.

Glavonjic said the results were “impacted by an inability to unlock supply”, following the administration and prolonged closure of Paragon.

“Obviously we didn’t see the events in Wodonga coming, but that’s now in the past. Now we have the confidence and the support of our major customers, and we now expect to be back on the front foot,” he added.

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