The largest creditors of one of Australia’s most significant print, marketing and distribution companies, Ovato, have now approved a 50 cent in the dollar pay deal for outstanding bills.
The vote, held by Zoom and convened by Ovato yesterday, resulted in unanimous approval of the scheme with one more hurdle remaining – a court appearance on Friday December 18 – before the full restructure and recapitalisation plan can be rolled out.
Ovato CEO Kevin Slaven said in a statement to the ASX:
“The vote is the next key milestone on the path towards implementation of the restructure and recapitalisation of the business, involving a capital injection of up to $40 million, 300 redundancies and the closure of the Ovato printing plant at Clayton in Melbourne.”
The company launched the legal bid last month in a bid to ensure its ongoing viability and the continued employment of 900 people.
Next steps
The NSW Supreme Court will have the final say on December 18 and providing this is approved Ovato Print Ltd, Hannanprint NSW Pty Ltd, Hannanprint Victoria Pty Ltd and Inprint Pty Ltd will be placed in the hands of liquidators.
Three hundred people across Australia are set to lose their jobs and have been directed to apply for their redundancy payout via the Fair Entitlements Scheme (FEG).
The timing of this has caused significant stress for many of these employees as they will not be technically be able to apply for their payment until Monday December 21 which coincides with the week of Christmas.
So long as these approvals are made, the Hannan family and Are Media Pty Ltd, an entity related to private equity firm Mercury Capital, will tip in $35 million for the forward operation of the print business as it looks to return to viability in 2021.
Some redundancy payments could be made early
Ovato’s spokesman said the company is doing all it can to assist these employees and will help with the FEG payment submissions, as well as provide outplacement services.
He also indicated that some redundancy pay could be made earlier, but pointed out this will be in the hands of the liquidator to approve and coordinate.
“We have initial indications from our advisors that a proportion of employee entitlements can be paid on the date of the redundancies,” the spokesman said.
“We are exploring other avenues of potential financial assistance to bridge the gap between redundancy and FEG payment of the balance of the entitlements.
“At this stage the gap will be no longer than eight weeks.
“We are also committed to doing everything we can to assist those exiting the business and we will remain supporting these employees including providing comprehensive outplacement support and will assist in FEG paperwork and applications.”
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The company and it owners should be ashamed its only in the last week they have pushed the mental health issue. I have had more communication with councillors in the last week than I have in the last 6 months, do they really have any idea the stress some people are going through. I bet they do but just don’t give a crap. With only 2 weeks before we are kicked out with nothing a little too late.
As long as the Creditors that have agreed to 50 cents in the dollar are not named, every trade supplier to the printing industry will be seen as being guilty of giving in to this regardless of whether they were an actual supplier to Ovato.
Rumours are rife about the way long term employees are being treated. Rumours too about who these suppliers are that are agreeing to write off 50% of their invoices.
Some clarity is in order so that not all suppliers are tarred with the same brush
I couldn’t care less about the trade creditors – but using the government to pay redundancies is beyond the pale. I really expected more from the Hannan’s but they are hiding behind the veil of being a public company after completely mismanaging the merger.
The creditors were listed in the Explanatory Memorandum and apparently the vote was unanimous. Don’t expect them to be named in this publication.