Six years ago I wrote a news story about Polestar's latest set of results, in which I quoted someone who spends all day poring over company accounts, thus: "Unless this superplant prints money it's difficult to see how they won't have to restructure their debt again. This business is less about printing and more about capital markets and debt restructuring."
The chaps at Polestar took exception to that comment at the time, but my expert was right. The Polestar story is one of a business that started off with a billion pounds of debt and has struggled under the weight of it ever since.
In one respect I take my hat off to Barry Hibbert and Peter Johnston for their seemingly endless ability to keep all the financial plates spinning, against considerable odds. Having said that, the latest twist in this tale of financial restructuring has left a sour taste.
That Polestar was allowed to hive off its pension deficit into a separate company in the first place was questionable enough. Now that decision has been exposed as deeply flawed, because the suits at Sun Capital Partners have, unsurprisingly, played hard ball over their takeover deal. Why indeed would they willingly take on a historical liability like this? The Polestar Pension Scheme trustees were presented with a fait accompli: take the £2.6m you have a secured call over and fight for anything else with all the other unsecured creditors when we put the business into administration, or take £3.6m to shut up and go away, while we swerve the outstanding £35m owed to the scheme.
This Catch-22 rested on their being no other possible option. For example, an alternative buyer for Polestar, or its assets, that could perhaps have resulted in a better outcome.
It's left an inequitable situation for the 8,600 members of the Polestar Pension Scheme, who may find their pension ends up in the Pension Protection Fund depending upon what happens with the recovery plan to fill the funding gap.
And it's not equitable to all the printing companies large and small who compete with Polestar, some of whom (St Ives, Communisis, BGP, and Pindar to name but four) are dealing with painful pension deficits of their own.
