Eddie Stobart thrashes out takeover deal
TROUBLED Eddie Stobart last night hammered out a rescue deal with private equity firm Dbay.
The haulier, best known for its forest-green lorries which traverse motorways, announced that Dbay was prepared to inject £55m of financing.
And in a plan designed to revive the firm’s fortunes, William Stobart – the son of Eddie Stobart’s synonymous founder – will rejoin the company as a board director.
The deal follows months of uncertainty for Eddie Stobart shareholders, after the company revealed a massive black hole in its accounts in August.
It had previously been unable to put a number on how much this scandal would cost, but yesterday began to drop further hints as to the extent of the damage. Eddie Stobart’s losses for the first half of the year will now be at least £12m, compared to an £18.1m profit over the same time last year, it said.
Profit for the full year will be no more than a paltry £2m, compared to £55.3m in 2018. And debt will have reached around £200m by the end of the firm’s financial year, on November 30, a level which the board described as ‘unsustainable’.
So it is proposing that Dbay should acquire 51pc of Greenwhitestar, an Eddie Stobart subsidiary which owns all the company’s trading entities. The remaining 49pc will still be owned by Eddie Stobart’s shareholders, through the stock market-listed company, but the value of their stake will be massively reduced. Sebastien Desreumaux,
the company’s chief executive, said: ‘We are undertaking a thorough review of the operations and, whilst this has highlighted a number of short-to-medium term challenges which the team and I are working determinedly to resolve, it has also reaffirmed my view that the company, and its extensive operational capabilities and unique network, is anchored by strong underlying fundamentals with significant potential for the future.’
The plan will need to be approved by shareholders at a meeting, scheduled to be held at the beginning of December. But already there are signs that some shareholders might not play ball.
Due to the accounting errors which Eddie Stobart discovered, it has failed to publish its half-year results while it tries to get to the bottom of the problems. One major shareholder told the Mail that, without seeing the results, it is impossible to know whether the Dbay offer represents a fair deal.
Wincanton, a rival haulage firm, had also indicated that it might mount a rescue bid for Eddie Stobart. It has until 5pm today to make its decision.
The trouble at Eddie Stobart emerged after chief financial officer Anoop Kang was appointed in April. The firm found errors in the way it had been accounting for certain contracts and a property transaction, and was forced to write these down.