Ovato, PVCA in war of words over deal

A war of words has erupted between the Print & Visual Communication Association (PVCA) and one of Australia’s largest printers, Ovato, as the publicly listed company pushes ahead with its controversial survival plan.

An elaborate restructuring and recapitalisation plan was approved in the NSW Supreme Court on December 21 setting in train a series of outcomes that have drawn stinging criticism across the industry.

Four Ovato entities are now in liquidation, over 300 staff are seeking their entitlements through the FEGS scheme and a number of major creditors have agreed to be paid 50 cents in the dollar for outstanding invoices.

At the same time, the Hannan family and Are Media have tipped in $35 million to ensure Ovato Ltd – which mainly prints and distributes magazines and catalogues – can continue to operate.

Ovato Chairman Michael Hannan

In an article in The Australian on January 11, PVCA president Walter Kuhn, speaking on behalf of the Association, criticised the Scheme of Arrangement saying it would harm the industry and that suppliers would now seek to recoup their losses by upping their prices to other printers.

He also said Ovato had set a precedent, not just for the printing industry but for every industry.

PVCA President Walter Kuhn

Only way forward: Slaven

Ovato managing director Kevin Slaven, who is on the Executive Board of rival printing industry association The Real Media Collective, has responded to Kuhn’s comments saying the Scheme of Arrangement was the only way forward for the company.

Ovato managing director Kevin Slaven

Slaven said had it not been implemented, the whole Ovato Group would have been in administration with all 1200 jobs on the line.

“Therefore, it is astonishing, absurd and illogical that Walter Kuhn of the PVCA should attack the Scheme and claim it will damage the industry,” Slaven said in a statement to Sprinter.

“To make the assertion that suppliers will increase pricing to the rest of the industry to recoup losses is completely unfounded and without substance or logic. The suppliers who incurred financial loss through the restructure were very few in number and all of them voted in favour of the Scheme.

“All other Ovato suppliers were not affected and have continued to be paid in full.

“Instead of making negative and unfounded assertions, I would have thought Walter and his industry body should be a little more positive that we have saved 900 jobs in the printing industry which the PVCA was created to promote and support.

“Ovato stopped providing financial support to the PVCA in recent years because we considered them almost irrelevant to the industry. His recent comments have validated our decision. If the PVCA was confident about its analysis and predictions, perhaps it should have made a submission to the Court so that it could be scrutinised like our material. They failed to do so.”

Kuhn has told Sprinter the PVCA was unable to put its case before the NSW Supreme Court as it was not a creditor, and as such had no right. However, it had made its dissatisfaction known with the federal government.

Erroneous claims about impact: PVCA

The Print & Visual Communication Association has hit back saying it is wrong to say the Ovato restructure will not hurt the industry, adding some members have already said their terms of trade have been substantially restricted.

“Kevin Slaven’s ad hominem attack as response to economic commentary does not reflect well on him personally, nor does it reflect well on the culture of Ovato,” the PVCA said in a statement to Sprinter.

“Our industry association stands for best practice and excellence. Unfortunately the trajectory of Ovato does not exemplify either.

“It is erroneous to claim that there will be no deleterious impact on the rest of our industry from the Ovato restructure. Members have already reported that some vendors have substantially restricted terms of trade, up to and including 100% pre-payment terms, explicitly as a direct consequence of the actions of Ovato.

“The President of PVCA personifies the voice of our industry, through the Association. PVCA’s policy position on the restructure of Ovato follows extensive discussion and unanimous agreement of the PVCA Board, informed by member feedback to the board members.”

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8 thoughts on “Ovato, PVCA in war of words over deal

  1. Kevin, Kevin, Kevin….

    Walter is on the money here…. and I noticed that your team even put in to your material that you forecasted a lower material cost in the brand new spanking entity. Pulp was going up and continues to do so and everyone knows that… and your guys are forecasting discounts after you just stitched up your main paper suppliers. Not how it works Kevin.

    Getting the taxpayer to pay for your redundancies was a disgrace and it is now the legacy that you leave, all of the good work over your decades (and the boards) of service are gone…. torn up. Some people care about doing the right thing.

    Don’t be disillusioned to think you’ve done anyone a favour here either….. yourself and your board have a lot of explaining to do and this issue is not going away.

    Please answer one question Kevin:

    Yourself and the board sign off that Ovato had 37 quarters (12 years!) of funding available in your Appendix 4c to the ASX on 29th October…. all was going well, nothing to see here….. BUT then McGrath Nichol said two weeks later in your ASX lodgement on 12th November that Ovato was insolvent (unable to pay it’s bills as and when they fell due).

    WHO WAS LYING KEVIN?

  2. Well done Walter, great to see some leadership.

    Hang our head in shame Kevin, fancy coming out and trying to defend this rubbish you’ve all pulled off in the last few months.

    Getting the taxpayer to pay for your redundancies was a disgrace and it is now the legacy that you all leave.

    All of the good work over your decades (and the boards) of service are gone…. torn up. And you all did some good things with plenty of fans in the industry… but those are all now gone.

    Greed, dishonesty and a lack of care for your people will haunt you all for your remaining days…. it is actually very sad to watch. And giving your CFO over $400,000 as a bonus during this was nothing short of irresponsible.

    Some people care about doing the right thing.

  3. You’ve read to much of your own press sadly Kevin…

    When you look in the mirror at night, knowing what you know, do you really think you dealt in good faith with the union for your staff??

    I mean a 625 page PDF (adding back in the page that was taken out…. you know, the one that had the 13 companies in the Scheme listed…. so that they didn’t feel the heat) doesn’t take that long to put together hey…. I’m betting it was in draft form when you were doing the deal.

    And that is dealing in good faith hey… do you treat your clients like that also, or just staff?

  4. REALLY???

    “could be scrutinised like our material”

    Kevin….. you’re running a public company buddy… I’m pretty sure you understand the disclosure requirements you have. It is meant to be read, that is why you have to do it. So that you don’t mislead investors.

    Did you not think people were watching waiting for the slip up’s in it?

  5. The material was hardly scrutinised by the ASX or the court Kevin….. I failed maths and can see more holes than swiss cheese in what was served up from June until now.

  6. As an industry stalwart the ovato situation is one of the worst I can remember. You are the MD Kevin – surely you take the responsibilty of the position with the rewards that go with it. How did it even get to this? It’s incromprehensible that the Board and yourself could not have foreseen this mess. Then to treat your staff this way, how can you sleep well at night? In regards to the different industry bodies. They have given our industry a voice, great work there! It is quite obvious though that there are a “network” of people in the industry that are creating a consortium that are limiting the breadth of stories we are receiving. Can they please look out for all, no matter where they sit in the food chain. Industry leaders should have called this out for what it is so much earlier. There’s a bit of a new age “boys club” consisting of both sexes that is brewing …

    1. PVCA encourage all industry to participate in informing PVCA policy positions, and it is this industry feedback that has defined our lobbying regarding Ovato’s regrettable path. The PVCA is committed to it’s role as the voice for all of our industry, large or small, strong or weak. Collectively, our industry voice is stronger. Occasionally this does require calling out behaviour of individual enterprises that negatively impact our industry.

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