Spicers to solve financial bottleneck

Spicers is slated to completely streamline its capital structure in a bid to merge its ordinary and hybrid shareholders, the proposal set to solve what the paper merchant calls a ‘financial stalemate’.

The paper giant has revealed it is in discussions with shareholders about a proposal to unify Spicers ordinary shareholders and preference holders, in a move it believes will ‘resolve several constraints that the current structure places on the company’.

If executed, the transaction will see Spicers acquire the remaining Paperlinx Step-up Preference Securities (SPS Units) in exchange for 545 ordinary shares to each holder.

The Spicers board says it trusts the restructure will assist the company in its operational turnaround and in undertaking the full range of financial and commercial activities ‘most listed entities take for granted’.

“Implementation of the proposed transaction would create a unified and simplified capital structure. Spicers may benefit by being able to raise capital and consider acquisitions beyond its current capabilities,” says Spicers.

[Related: Spicers finds new CEO]

A Spicers spokesperson told ProPrint the proposal will ‘resolve the Spicers dysfunctional capital structure’ and will improve supplier and client relationships thanks to a further liberalised financial arrangement.

“The proposal will see Spicers return to a normal financial structure for an ASX-listed company, as it has been in a sort of financial stalemate for some time,” says a company spokesperson.

“It has been a long-running issue for the company, and Spicers has attempted it previously however was unsuccessful. Hopefully it strikes the right note with shareholders.”

A shareholder restructure would also see the paper supplier able to pay dividends, according to the Spicers representative.

The proposal comes soon after controversial former Spicers boss Andrew Price hit out at the paper giant for its recent ‘underperformance’, saying he believed the board had no plans to resolve its issues.

Spicers says it is still in ‘ongoing discussions’ with its Trust Company, and more details about the proposal are set to follow in the coming months. 

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