HK printer buys $51 million Opus debt for $20 million

Fire sale of CBA debt ‘provides financial stability’ following Opus $35 million loss after tax for the six months ended 31 December 2013.

1010 Printing Group has emerged as the effective owner of the heavily leveraged Opus Group by paying the Commonwealth Bank $20 million in due debt and standing in as the troubled company’s senior debt  provider for the remaining $31 million that falls due in 2016. The two groups have worked together as allies and competitors with 1010 operating a huge printing plant in Yuanzhou, Guangdong Province in China.

The move was welcomed by Bill  Mackarell,  the OPUS Chairman  who said the Board  and  management  team  were pleased  that  1010  has given such  strong  support  for OPUS’s  business  by  committing  substantial  funds,  time and effort. He singled out CK Lau, co-founder and executive director of 1010, as someone the company has worked with over the years.

“Some of  us  at  OPUS have  known  CK  Lau  for  a  while  and  his  impeccable  reputation  in  the  international   printing   industry   is   a   very   strong   endorsement   of  OPUS.  OPUS has been challenged  by  its  financial  structure  for  some  time  now  and,  once  we  arrive  at  a  suitable  financial  structure  we  look  forward  to  those  shackles  being  off  and  to  OPUS aggressively  pursuing  the  many  opportunities  that  are  available to it,” said Mackarell.

OPUS and   1010   have   had   commercial   links   for   several   years   through   respective   senior management connections.  As the product  offerings  are  largely  complementary  and  in  many  cases  to  the  same  international  customer  base,  OPUS and  1010  have  consulted  from  time  to  time   on   business   initiatives   and   as   a   result   have   developed   a   mutually respectful  relationship.

The takeover will undoubtedly result in some rationalisation of the Opus Group. However, calls to Opus in Sydney went unanswered.

The deal goes into effect tomorrow July 31. According to the Opus press release,  by then it  is  envisaged  that  1010  and  OPUS will  have  agreed  on  new  terms  for  the  debt. As  soon  as  possible  after  settlement,  1010  has  advised  that  it  will  explore  possibilities to  restructure  the  debt  and  for  new  capital  to  be  injected.  1010  has  advised  OPUS that  it  expects the  discussions  [to] result  in  a  further  announcement,  which  will  set  out  the  basis  of  a  secure capital  structure  for  the  future.