CM 10.09.15Vehicle operator Eddie Stobart

Eddie Stobart Logistics (ESL) has been saved from the threat of administration after shareholders voted to accept a takeover bid by private equity firm DBAY Advisors.

DBAY will take control of ESL's assets in a £75m bailout backed by William Stobart, fourth child of its founder Eddie, in a deal that gives it an eleventh-hour reprieve following reports that accountancy firm Deloitte had been lined up to prepare it for insolvency.

The deal, which sees DBAY take a 51% stake in the company, marks a victory for William Stobart over former ESL group CEO Andrew Tinkler, who had made a rival £80m bid and recently purchased a 6.5% stake in the company.

Reports say Tinkler was present at today's (6 December) crunch shareholder meeting, from which the media was barred, and that his tone was calm.

ESL said DBay’s offer was the only one that would prevent its banks – AIB, BNP Paribas, Bank of Ireland and KBC – from foreclosing on loans. It said this would have pushed the company into administration almost immediately although key information on its current finances is still to be disclosed.

In return for the £55m loan DBAY is offering as part of the overall deal, it is understood it will charge ESL an interest rate of 18%.

This will give DBAY a stronger claim to any ESL profits, as debts are paid before shareholders see any payments.

A DBAY statement following the announcement read: "Following the company's General Meeting this morning, DBAY is pleased to confirm that the company’s shareholders have approved its proposal to provide the liquidity needed to safeguard the immediate future of the business.

"Shareholders voted overwhelmingly in favour of the resolution.

"As an immediate consequence of this vote, the business will receive the necessary funding to continue trading through the busy Christmas period.

"William Stobart returns as executive chairman of Greenwhitestar Acquisition Limited, the holding company of the business, to work alongside the existing management team.

"Under DBAY’s previous owsnership, the business thrived as a highly profitable, cash generative logistics business. Following this vote, DBAY is confident that Eddie Stobart will return to its previous strength.

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“We would like to thank shareholders for supporting our transaction which will bring immediate stability to the business. Eddie Stobart’s loyal staff are the best in the industry and we are pleased to be able to provide certainty over their jobs throughout the Christmas period and beyond.

“We would also like to thank the lenders to the company for their flexibility which will be invaluable in returning Eddie Stobart to a stable footing.

“Finally, our thanks go to the supportive customers who have continued to trust Eddie Stobart and its brand, and the suppliers who have continued to trade with it."

ESL CEO Sebastien Desreumaux said: "The proposed transaction provides Eddie Stobart with the opportunity to move forward and look to deliver sustainable growth and profitability from a stable footing.

"Our main priority and focus is now continuing to deliver the high levels of services expected by our customers as we move into the busy Christmas period."

Also responding to the news, Unite national officer for road transport Adrian Jones said: “Unite is already in the process of seeking an urgent meeting with the new owners to discover what plans DBAY have for the short-, medium- and long-term future of the company.

“The recent financial problems experienced by Stobart’s has led to our members at the company becoming very anxious about their employment. A situation made worse by the lack of information provided.

“Unite hopes that early discussions will pave the way for an improved industrial relations climate with Stobart’s.

“However, the new owners need to be fully aware that Unite will not allow profits to be ramped up at the expense of our members’ jobs, pay or conditions.”

Unite has around a 1,000 members at the company.

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