The report to creditors also states that Polestar was not marketed for sale prior to being acquired by Prospect Bidco (subsequently renamed Polestar UK Print), which is wholly-owned by Proventus. “It is the administrators’ view that any marketing of the business would have had a detrimental impact on the value achieved for creditors,” the report stated.
Options such as a CVA or a trading administration while a buyer was sought were not considered viable.
Toby Underwood and Matthew Callaghan were appointed as joint administrators of Polestar’s main trading entities on 24 March.
Prospect Bidco subsequently acquired the group in a pre-pack deal for £65.93m. This included the share capital of The River Group, the owner of River Publishing, which was acquired by Polestar’s former owner Sun Capital in summer 2014. River Publishing was not part of the administration. “It remains solvent and is otherwise unaffected by this transaction other than the change in its ultimate parent,” PwC stated.
Swedish investment house Proventus loaned Polestar £90m in April 2015. It subsequently took over the ownership of the group from Sun Capital in December, when Polestar nearly ran out of cash.
The PwC report stated that secured creditors, excluding finance leases, were owed circa £131m at the time of the administration. “We currently consider that the secured creditors will suffer a shortfall on the debt remaining in the company of approximately £67m,” it said.
A sum of £600,000 is available for Polestar’s unsecured creditors.
The report details the background to the situation, including the disruption and operational issues around its £50m web offset investment in Goss web offset presses at Sheffield.
It states: “The financial implications of this are estimated to be in excess of £15m and created significant cash pressure across the group.
“As a result of the above financial and operational issues, the directors determined that a restructure of the group was required. The directors initially sought to restructure the business solvently… but this could not be achieved.”
Polestar had taken on all of the work for publisher Time Inc UK prior to its new presses coming on-stream, and had to outsource a large amount of work during that period.
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