Polestar UK Print and Polestar Stones-Wheatons went into administration on 25 April, just a month after the group was sold back to its former owner Proventus Capital Partners in a pre-pack deal.
BPIF chief executive Charles Jarrold told PrintWeek that the federation was “as uncomfortable with this process as everyone else”.
“It didn’t tick the boxes on two particular issues. The business hadn’t been actively marketed and then there’s the viability issue. I find it difficult to comprehend how a worthwhile viability report can have been made that didn’t identify the risks that caused the business to fail again,” Jarrold said.
The viability statement prepared by the directors of Prospect Holdco (subsequently renamed Polestar Print Holdings) and Prospect Bidco (renamed Polestar UK Print) stated: “The boards of the companies are confident that 2016 will be a transformational year which lays the groundwork for stable EBITDA and cash flow from the second half of 2016 onwards. This is because, subsequent to the transaction, the companies will: have access to a £6.9m new cash injection; benefit from a reduction in group indebtedness, including savings of £2m in rental payments; be able to implement greater production efficiencies.”
The directors also stated that they had a “reasonable expectation” that the group would be able to “continue in operation and meet its liabilities as they fall due for a period longer than the next twelve months, and have no reason to believe the group will not be viable for a longer period”.
The opinion of the Pre Pack Pool’s Colin Coghlan, based on the information supplied to him by Proventus Capital Partners chief executive Daniel Sachs, was: “I have not found anything to suggest that the grounds for the proposed pre-packaged sale outlined in the application are unreasonable.”
Jarrold also pointed out that the Polestar case should not be taken in isolation. “One instance, however big and disruptive, doesn’t necessarily prove the Pre Pack Pool isn’t working,” he added. “The Pre Pack Pool is trying to address the issue of serial abusers of the pre-pack process.”
The BPIF is one of a dozen trade and professional bodies to oversee the voluntary Pre Pack Pool assessment system, which started up six months ago.
“I want to make it clear that we are not blind advocates of the Pre Pack Pool,” Jarrold stated. “But I do feel we have a stronger voice if we are involved in the process, whereas if we had stood outside of it from the start I don’t think we’d have been listened to.”
The federation’s Government & Industry Committee, which is chaired by Pinstripe Print Group managing director Nigel Lyon, will meet next month.
“My issue with this [Polestar pre-pack] is with the people who put this deal together. Did they do any risk analysis of it? If they did they would have known the chances of succeeding were not particularly great,” Lyon said.
He said it was important for BPIF members to have confidence in the measures implemented by the Pre Pack Pool.
“I’m supportive of what the Pre Pack Pool does and it’s disappointing that people sometimes misinterpret its role. I’m very keen that, as an industry that’s had particular abuse in this area, we should be part of anything that is implemented and feel comfortable with it,” Lyon added.
