The company has reached agreement with its majority owner, Australian private equity company Champ, to extend an offer to bondholders to take part in an A$11.7 million ($14.6 million) second secured loan that the company is issuing.

In a statement Blue Star said, “The board also notes that if the amendment offer is not accepted by bondholders, they expect senior lenders to quickly move to protect their interests and this is likely to see receivers appointed. In this scenario, it is probable that there would be no value recovery for bondholders.”

Chris Mitchell, managing director of Blue Start Print Group, says, “Firstly, we are under no illusion that this is a bitter pill for bondholders – but it provides bondholders with the best proposal available and it provides time for our strategies to generate the profit growth we have forecasted and for markets to recover. Secondly, in these situations there are always those who think that there is a better way or that everything is up for discussion and negotiation. There is no recut of this deal as it is the best possible after extensive negotiations with senior lenders and shareholders.”

Earlier this year Blue Star, under its Webstar division, made a massive investment in heatset locally, after winning the ACP publishing contract for all its titles in New Zealand.

Mitchell has appealed to bondholders to go with the proposal. He says, “People are not happy but this is the situation we are in. This is a great company and I sincerely hope that investors put emotion aside and vote with common sense.”

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