Opus Group executive chairman Richard Celarc says it is early days but it is possible a deal struck between Opus’ parent company, the Hong Kong-based Lion Rock Group, and Ovato could mean the Australian company which is now in voluntary administration could fall into Opus’ hands.
The industry is still reeling from the news that Ovato, a company formed through a mega-merger with the historic and well respected Hannan family’s IPMG and another print giant PMP, is in voluntary administration.
Ovato cited ongoing volatile market conditions, the increased cost of raw materials, and legacy cost issues as why its directors made the difficult decision to go into voluntary administration. Ovato is now being run business-as-usual by FTI Consulting administrators while the situation is assessed.
The move comes after Ovato sold off several business units including most recently the former Griffin Press book printing division to Opus Group for $8.5 million – a deal the Australian Competition and Consumer Commission has now approved.
This deal, included in documents publicly available on the Hong Kong Stock Exchange, also included Opus Group receiving a $2.5 million Convertible Note from Ovato which now means Opus Group holds a 14.7 per cent share in Ovato.
Prior to this, in April this year, Opus acquired the $4.86 million Ovato owed to debtor financier, Scottish Pacific, and also provided an additional loan to the company of $5.14 million.
When asked if these arrangements could mean that Ovato could fall into the ownership of Lion Rock and by default Opus, Celarc said it was possible but reiterated that it was still very early in discussions.
“It is hard to say quite definitely because it is very early days at the moment, but this is quite possible although there is nothing on the table at the moment,” Celarc told Sprinter.
“I am not as close to it all as what I could be. I’m back a little bit and other people in the team are spending a lot of time with the administrators and with Ovato Group working out where it is all at at the moment, so I can’t make a comment right now. It is still playing out. We are still in a very tender situation at the moment because it has only just happened.”
Celarc also confirmed that Lion Rock Group director Mr CK Lau is currently in Australia.
As it stands now, it is business as usual at Ovato with FTI Consulting administrators Chris Hill, Ross Blakeley and Ben Campbell now running Ovato while assessing the situation.
The first creditors meeting, which will include Opus Group, is expected to be held in early August, with a second meeting to follow at which time a full report will be made to creditors.
There has also been an outpouring of sadness about the situation with many in the industry expressing their best wishes that Ovato can trade out of the situation and that all staff and suppliers will be looked after.
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