Finweek English Edition - - Cover -

THIS GRAPE PACKAGING spe­cial­ist de­serves some credit for be­ing one of the few un­listed ven­ture cap­i­tal com­pa­nies to pub­lish au­dited re­sults to share­hold­ers in rea­son­able time. How­ever, op­er­a­tionally, Vin­guard – which man­u­fac­tures sul­phur diox­ide gas-gen­er­at­ing sheets – has been over a bar­rel for the past four years. In Au­gust 2004 Vin­guard is­sued new shares in a much-hyped pub­lic, pref­er­en­tial and pri­vate of­fer at prices be­tween 60c and 65c/share. At that point Vin­guard car­ried an in­ferred val­u­a­tion of around R60m – sup­ported by prospec­tus fore­casts of R17m in rev­enue and R1,7m in net prof­its for the year to end-June 2005.

But its an­nual re­port to end-June 2008 re­flects noth­ing that could jus­tify a R60m val­u­a­tion. Vin­guard posted a net loss of al­most R1,7m from turnover of just R2,5m and its bal­ance sheet screamed in­sol­vency, with to­tal li­a­bil­i­ties ex­ceed­ing to­tal as­sets by more than R2m.

It was around that time packaging gi­ant Mondi sold its 37% stake in Vin­guard to John Daniel Hold­ings (JDH) – which al­ready owned around 37% of the grape packaging spe­cial­ist – for a nom­i­nal R1. Mondi’s will­ing­ness to “buck out” sug­gested Vin­guard’s prospects were all but crushed.

For­tu­nately, par­ent com­pany JDH – which it­self raised R10m in new fund­ing – rode to Vin­guard’s res­cue with a loan that al­lowed the com­pany to set­tle cred­i­tors and get back into busi­ness.

Vin­guard has been tak­ing or­ders since Oc­to­ber 2008, which will hope­fully gen­er­ate much-needed cash flow to ser­vice higher debt lev­els in its 2009 fi­nan­cial year.

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