Saturday, November 23, 2013
I’ll give 100 to 1 odds that what happened to SP USA won’t happen to SP UK.
As I’ve stated several times before this on my blog, the decision to abruptly and totally shut down SP USA was one of the dumbest decisions, if not THE dumbest decision, that I’ve observed in my 40+ year involvement in the reprographics business and industry.
The reason why I’m writing this blog post this morning - - - Early this morning, I received an e-mail from one of SP UK’s current team members. (My comments will resume below the e-mail):
I just wanted to write you a quick message to say thank you for your blog.
As an employee of Service Point UK, it is the only source we have for accurate information on what is currently happening within our company. The staff are just not being talked to just now - management and sales staff have all been conference calls but these have been (IMO) filled with misinformation and rhetoric. The message they've to convey to clients, if asked, is that SPUK is a completely separate entity from SPS Spain and remains unaffected. The amazing thing is that nobody is asking any questions - they all just believe what they are told.
Any staff with a computer can easily find out this isn’t strictly true. Anyway SP USA had a similar set-up to SP UK and it hasn't done them any good! We know that SPUK is owned by GPP (in administration) which in turn is owned by SPS Spain. We know that the assets of SP UK were offered as guarantees for the loans taken out by SPS Spain. Whenever we ask anything - we're told everything is fine in UK and we are strong.
We've to believe that SPS Spain applying for creditor protection and shortly after that GPP being put into administration is complete coincidence. We've to believe that GPP being in administration will not affect us one bit. We've also to believe that the sudden and unexpected redundancies of colleagues that has happened over the last two weeks is completely unrelated. As is the re-branding to UDO, which has apparently been the result of extensive market research.
The way we've 'purchased' machinery in the past few years means we don't actually own them and so don’t have many assets.
Anyway, please feel free to correct me on any of the above - it would be useful to know if our own research was flawed!
Thanks again - I've kept most of my details private as ………. - hope you understand,
SP UK will not be shut down. SP UK is a valuable asset. Now that SP’s lenders, apparently, control SP UK, they will (working with the administrator that’s managing the holding company that controls SP UK) do whatever they can do to preserve the value of the SP UK asset. That does not mean that there will not be changes. For it would be rare for lenders to not want to, at some point, convert to cash assets that have been pledged as collateral on loans previously made. In other words, lenders don’t want to own the business, they just want to recover some (or all) of the money they are owed. The only way for lenders to maximize the amount of money they will end up with is to preserve the value of SP UK until the lenders have a plan to realize (convert to cash) SP UK’s value. And, I’m speaking of SP UK’s “enterprise” value, it’s value as an ongoing, operating business. As to possible outcomes (for lenders to realize value), just a few that come quickly to mind:
-SP UK could be sold to one or more buyers who already have interests in the reprographics business.
-SP UK could be sold to one or more buyers who have not heretofore been involved in the reprographics business, but who are interested in getting involved in the reprographics business.
One or more buyers? Well, the operations could be split up and sold to different buyers. I don’t see that happening, but that can’t be totally ruled out.
-The Lenders may choose to continue the operation of the SP UK business for more than just the short term.
The one thing that I’m positive won’t happen is that SP UK will not be shut down. For anyone to repeat with SP UK what took place with SP USA would be absolutely ludicrous.
Posted by Joel Salus at 7:40 AM