Opus takes over Ovato’s ScotPac $5m debt finance

Left Field Printing Australia Ltd, a Hong Kong-headquartered company which wholly owns Australian-based Opus Group has paid out the $4.86 million owed by Ovato to trade financier, Scottish Pacific, and advanced a further $5 million to Ovato.

Opus Group is a key player in Australian print, with a focus on book printing, as the owner of CanPrint, Ligare and McPherson’s Printing Group and is headed by executive director, Richard Celarc.

It is wholly owned by Left Field Printing Ltd and is a non-wholly owned subsidiary of Lion Rock Group Ltd. Left Field Printing Ltd and Lion Rock Group Ltd are listed on the Hong Kong stock exchange.

The news comes as Ovato announced it is closing its heatset print operations in New Zealand, with 100 employees to be made redundant. Ongoing paper shortages and price hikes were attributed as key reasons for the NZ closure.

Ovato CEO James Hannan told Sprinter the rationale for changing debt lenders was about working with a lender who understood Ovato’s business on a deeper level.

“It was driven largely by finding a debt provider that understands our business more deeply and using that understanding to be willing to lend additional funds,” Hannan told Sprinter.

“Operationally it has no impact on our business other than to have an industry player who has a vested interest in our success.”

Lion Rock Group and Left Field Printing Ltd published a joint announcement outlining the terms of the deal which involves Opus, an indirectly non-wholly owned subsidiary of Lion Rock and a directly wholly owned subsidiary of Left Field, acquiring the Chattel Mortgage Loan from ScotPac and granting an Additional Loan to Ovato by way of entering into the Deed of Assignment and the Priority Deed.

Under the deal, Opus has paid $4.86 million to Scottish Pacific, to take over Ovato’s Chattel Mortgage Loan facility, which when it was set up was at $17 million. In addition, a further $5 million is being lent to Ovato from Leftfield Printing/Opus.

The statement added the Chattel Mortgage Loan bears an interest rate of 8.5% per annum with “the principal amount of the Additional Loan, together with any accrued interest thereon, are repayable on 25 November 2023”.

Secured property for the deal includes Ovato Group machinery and equipment which the statement said, as at the end of January 2022, had a net book value about A$29 million (equivalent to approximately HK$168.2 million).

The statement goes on to say the directors of both Lion Rock and Left Field were, “of the view that the Acquisition and the Additional Loan provide the Left Field Group with better returns than fixed deposits generally offered by commercial banks in Australia and Hong Kong.

“In considering the Acquisition and the provision of the Additional Loan, the Lion Rock Directors and the Left Field Directors have taken into account the stable interest income generated or expected to be generated from the Acquisition and the Additional Loan, and the short-term nature of the Chattel Mortgage Loan and the Additional Loan.

“The Acquisition and Additional Loan were funded by Left Field Group’s surplus cash reserves, and thus would not affect Left Field Group’s working capital position or business operations. The Chattel Mortgage Loan and the Additional Loan are secured by the Secured Property. Accordingly, the Lion Rock Directors and the Left Field Directors consider that the terms of the Acquisition and the Additional Loan are on normal commercial terms which are fair and reasonable and in the interests of the shareholders of Lion Rock and Left Field as a whole, respectively.”

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