Troubled 3PL Eddie Stobart Logistics (ESL) is reported to be lining up accountancy firm Deloitte to prepare it for insolvency if shareholders reject a rescue package from private equity firm DBAY Advisors.
Investors will vote on whether to accept the deal tomorrow (6 December) and the Daily Telegraph claims ESL's holding company will be put into administration if an agreement cannot be reached.
DBAY's proposal includes a £55m high-interest loan in exchange for DBAY taking a majority stake.
But in a stock market statement yesterday (4 December), ESL repeated that if the EGM vote isn't successful "the board will be faced with an imminent liquidity shortfall, imminent expiry of the waiver and no support from the lenders to explore alternative options".
"In these circumstances the lenders would support the board taking steps to achieve the DBAY transaction by an alternative route which would see no return to shareholders."
The statement went on to reiterate that the banks will not consider any other proposals and are fully behind the DBAY bid which "protects the businesses, employees, customers, suppliers and financial creditors whilst offering participation in the future of the group to existing shareholders".
Meanwhile, a rival £80m bid for ESL by former CEO Andrew Tinkler is continuing to "gather shareholder support", according to TVFB (3) - a company he controls.
TVFB (3) is reported to have offered a £20m bridging loan and has urged the company to vote through its own rescue package or delay tomorrow's meeting by a week.
Tinkler claims his bid has the support of the "vast majority" of ESL shareholders and is "materially better on multiple fronts" whereas the DBAY proposal has "very limited support".
Read more
- Former Eddie Stobart boss Andrew Tinkler increases bid and buys 6.5% stake
- DBAY warns Eddie Stobart Logistics shareholders to vote for its proposal or face “imminent liquidity shortfall”
- Former Eddie Stobart Logistics boss Andrew Tinkler claims ‘vast majority’ of its shareholders back his takeover bid
However, ESL said statements made by TVFB that it will be able to implement its proposal without repayment of the credit facilities in full are "misleading to shareholders". It continues to recommend that shareholders vote in favour of the DBAY proposal.
Meanwhile, around 1,000 ESL drivers and warehouse staff claim they have been left in the dark about their future, according to Unite.
The union said it had sought meetings with the company “on a number of occasions” to seek reassurances about jobs, but it had received no response, leaving members “extremely concerned”.
Unite national officer Adrian Jones said that “boardroom games” were putting jobs at risk, as well as jeopardising the supply chain for many major firms.
Jones said: “Our members deserve to know what the future holds and not be a pawn in a game being played by financiers in the shady world of venture capitalism.
“We demand that the board meet with Unite representatives to give clear guarantees that jobs are not at risk.”
