One year on Blue Star NZ bondholders will lose the lot

Investors in the New Zealand bonds (NZDX) of the troubled printing group are unlikely to see any return on their $105 million when the company is sold.

Blue Star applied to the New Zealand Stock Exchange to de-list the capital and Participating Bonds in order to protect the integrity of its current sales process. The bonds will be removed from public view on 28 August. The de-listing stops any requirement for NZX reporting and Blue Star releasing an annual report.

According to the company the bonds are now trading effectively at a nominal value, infrequently and on very low volumes. In a statement it said The Board now considers it unlikely that any value will attach to the Group’s NZDX listed bonds.

The delisting is the final act in a slow train wreck for the bondholders who last year voted to split their holdings into two lots – one that would not pay interest until 2013 and the remainder, $37.5 million, that would never pay interest. The deal was framed as either that or the company would go broke.

Under new CEO Phillip Bower, the group has hired Goldman Sachs to oversee a sale and likely break-up of the trans-Tasman printing enterprise. It is one of the largest companies in the industry with 13 production sites spread across Australia and NZ. The break-up process began with the sale of Rapid Labels last month to originator, Tom Sturgess.

CHAMP Private Equity will lose hundreds of millions of dollars from its ill-fated investment. The US-based fund bought the company for NZ385 million in December 2006 with the intention of floating it on the Stock Exchange. Sales estimates now range between $100 and $150 million.