McLeod fights on
Investor backing for Superglass recovery plan
THE chief executive of Superglass Holdings, Alex McLeod, said the troubled insulation manufacturer could enjoy a successful future after it won overwhelming backing f or a restructuring he described as transformational.
More than 99% of votes cast at a general meeting approved a plan under which Stirling-based Superglass raised £12.9 million from investors through a share placing to stabilise its finances.
The company will use £3m to repay some of the £12m it owed to Clydedsale Bank. The bank is converting another £5.7m into convertible shares – that could hand it around 10% of the company – and writing off £750,000 fees.
Announcing the placing and proposed restructuring on May 3, Superglass warned it would have to enter insolvency proceedings if the scheme was not approved.
The placing will result in a significant dilution of the holdings of small shareholders.
The shares in issue prior to the restructuring represent just 7.2% of the enlarged share capital following the reorganisation.
Belfast-based commodities and agricultural group W&R Barnett, Superglass’s largest shareholder, increased its stake from 22.3% to 26.6% after spending £3.5m on new shares. London-based hedge fund Ennismore Fund Management increased its holding to 21.8% after committing £3m.
Superglass is switching from the main market of the London Stock Exchange to the junior AIM market.
However, Mr Mcleod said the size of the proxy vote in favour of the resolutions dealing with the placing and restructuring showed it had the support of existing shareholders.
There were no more than 1600 votes cast against any resolution. At least 25.2 million votes were cast in favour of all the resolutions.
Speaking after a meeting attended by just four people including advisers, Mr McLeod noted: “There will still be some value for small shareholders.”
He added: “This is really good news for the business, if you think where we have come from, having under-invested and having high levels of debt. In challenging circumstances we have got investment into the business to take the cost base down and we have got debt down.”
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terms of overall markets we are in a hiatus but there still remain lots of lofts and cavities to be addressed
The company has net cash following the fundraising.
Mr McLeod believes the fundraising and previously announced investment by the company will put Superglass into a much stronger position to deal with the difficult market conditions the company has been facing. The company has been hit by the downturn in the housing market.
Following a long wait to see official efforts to encourage people to reduce carbon emissions provide a significant spur to insulation sales, Superglass would like more urgency injected into the recently introduced Green Deal.
“In terms of overall markets we are in a hiatus but there still remain lots of lofts and cavities to be addressed in this country,” said Mr McLeod.
Asked if there was a future for an energy-intensive manufacturing business like Superglass in Scotland, he said: “I believe so.”
Mr McLeod said investment in the company’s plant should cut energy consumption by 25%. Improved compression of the insulation it produces will allow it to increase the volumes carried on trucks and secure a reduction in transport costs. The debt reduction will allow it to cut interest bills.
He said the company is doing its best to keep as many people employed as it can in Stirling. The company employs 170 people there compared with around 200 three years ago.
Superglass expects to delist from the main market on 4 June and relist on AIM the same day.
In a related share consolidation every 25 post-capital reorganisation shares will be consolidated into one new ordinary share.
The company placed 25,800,000 new ordinary shares at 50p per share. This was equivalent to 2p per share on a pre-share consolidation basis, the same as the closing price on 2 May 2013.
Superglass floated at 180p per share in July 2007. TECH giant Yahoo has snapped up Tumblr in a major US deal that will reportedly net the blogging site’s 26-year-old founder a $250 million (£164m) six years after he started it.
The $1.1 billion (£720m) deal makes New Yorker David Karp, who went to high school f or j ust a year, the latest internet whizz-kid to scoop an astronomical windfall from a web start-up.
The move will give Yahoo its own social media platform as it attempts to attract younger internet users in a bid to match its rivals Google and Facebook.
Yahoo, led by chief executive Marissa Mayer, said: “Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business. David Karp will remain CEO.”
Best known for its clean, simple design, Tumblr today claims to host more than 108 million blogs, with over 50 billion posts. It attracts more than 300 million unique visitors each month and 120,000 sign-ups every day.
Tumblr’s roster of celebrity users features pop singer Beyonce and media mogul Rupert Murdoch.
In his blog on Tumblr, Mr Karp announced: “I’m elated to tell you that Tumblr will be joining Yahoo.”
The message went on to promise Tumblr users that the deal would not “compromise” on its vision of making the site the “ultimate creative canvas”.
Yahoo has 700 million customers worldwide and employs 11,500 people in 26 countries, including the UK.