Investors step up to the plate and give PMP the green light on a $50 million loan, but the print and distribution giant reveals it has no plans to put any of the funds toward new press equipment.
PMP recently announced an unsecured corporate bond offer at $40 million, arranged by super-fund specialists FIIG Securities, to partially refinance its substantial bank debts but investor interest has raised the stakes by a further $10 million. The bond will go some way to diversifying PMP’s net debt of $89.1 million for FY 2013, but management recognise that there is still a long road ahead for the struggling company.
- Peter George, CEO, PMP
Peter George, CEO, PMP, said, “We are pleased with the strong investor demand for the bond and we see this as endorsement of PMP’s strategic direction of transforming the company into a leaner, stronger and more competitive industry leader. The success of the offering enables us to pay down bank debt, increase the tenor of our debt and diversify our funding sources.”
Speaking with Print21, Ian Greenshields, spokesperson for PMP, confirmed that management was encouraged by the level of support, notably the $10 million increase seen on the offering.
“We interpret that as people beginning to understand and believe in the company turnaround. This is tempered by management being very much aware that the job is not finished yet, and there is still a lot of work left to be done,” said Greenshields.
In a bid to chip away at that debt, FY 2013 has seen the closure of its Chullora site, the sale of several presses, the divestment and its Pacific Micromarketing business and a total of 412 jobs cut. PMP has spent $27 million on its most recent phase of rationalisation, producing $37 million annualised savings.
Greenshields adds that PMP’s transformation is not yet complete, and that the $50 million bond comes as the company enters in its third phase of restructuring and repositioning in what he describes as a challenging industry.