Paperlinx has sacked chief executive Andrew Price just 17 months to the day after appointing him to the top job.
The giant paper merchant terminated Price’s contract “with immediate effect” despite it being due to expire in April, and handed the reins to chairman Robert Kayle until a replacement is found.
No reason for dumping the colourful and controversial figure has been given, just a brief statement to the ASX. Price's predecessors were at least allowed to resign with something resembling dignity when he forced them out.
“The board believes the group will benefit from new leadership as it continues to evaluate all strategic options as part of the strategic review,” the statement says.
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Price’s sacking brings an abrupt end to his spectacular rise from Paperlinx critic to powerbroker, and his plan to turn the ailing business around after years of massive losses.
In February 2012 Price staged a narrowly unsuccessful coup against then-chairman Harry Boon before making the shock decision to join the board as a non-executive director in August of that year.
Boon was gone a month later, at the end of a strategic review not unlike the company’s current one, and Price rose to chief executive in September 2013.
Price's ousting is despite Paperlinx six months ago reporting 31 per cent smaller losses of $63.6m, 71 per cent lower EBIT losses of $7m, down from $24.2m in 2013, and historically low debt.
The sudden decision comes in the midst of a 90-day strategic review of all Paperlinx non-ANZ operations, with ‘all options on the table’ from buying up companies to selling off overseas assets.
As a result of the review, Paperlinx last week sold its Canadian arm, Spicers Canada, to Central National-Gottesman for $65m.
The company now says it “is in discussions with several interested parties which may result in the sale or restructure of part or all of its European operations”, and is also considering capital raisings or capital restructuring.
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When the review, conducted by Deloitte and investment bank Moelis and Company, was launched in December, Price said Paperlinx was “trying to spark some sort of consolidation”.
“We haven't seen the upswing we hoped for, right across Europe. And what we're seeing is that we need to do things differently,” he said.
“We've had talks with all of the major paper groups across Europe – about mergers, about acquisitions and about disposals – and all offers are on the table.”
Price said European paper orders had “fallen more than expected in the first half” of FY15 and prices were “at their lowest in living memory because some of the new entrants to the supply chain have destroyed pricing”.
Price has as yet been unreachable by phone. We will update when more information is available.
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