20:20 chief told: fix it by May

0
298

New 20:20 Mobile chief executive Meinie Oldersma, just 48 hours in the job, was last week given three months to sort out troubled distributor 20:20.

At a meeting at the company’s Crewe headquarters on February 4, Oldersma was introduced by 20:20 parent company Doughty Hanson to the Royal Bank of Scotland (RBS), the senior debtor in its £347 million purchase of 20:20 in late 2006.

RBS granted Oldersma until May to markedly improve the firm’s performance, claimed a source close to the situation.

In November last year, profit across all its international business units was £1.6 million on projected EBITDA of £9 million. 20:20 has not yet officially breached its loan covenants, but only because RBS has deferred testing its performance against the terms of the loan.

If results do not improve and 20:20 is found in breach of its loan agreement, Doughty Hanson could be forced to invest up to £150 million to reduce the amount of debt fielded by RBS.

It could also be forced into a debt-for-equity swap with RBS, which would see the bank take a stake in 20:20 and, potentially, part-control of the distributor.

Members of RBS’s debt syndicate and representatives from Japanese bank Mizuhno, the ‘mezzanine’ debtor in the 20:20 purchase, were also present at the meeting, as were accountants and consultants from KPMG and advisors from Houlihan Lokey. In total, around 50 people attended.

RBS has appointed KPMG to compile a report about 20:20’s trading situation. Doughty Hanson has appointed Houlihan Lokey as restructuring advisors and Bain and Company, which missed the meeting, as consultants. Bain and Company is to compile its own report on 20:20’s trading situation for Doughty Hanson.

The reports will be considered at the end of March. Another meeting will take place to discuss their findings and RBS is to consider its options again then.
Doughty Hanson and RBS both declined to comment.

Meanwhile, 20:20 chief financial officer Matthew Moulding is to quit the Crewe-based distributor. His exit was announced at the meeting.

 

NO COMMENTS

LEAVE A REPLY