Monday, March 17, 2014

According to an article in PrintWeek, Service Point UK is up for sale

Although this article – from PrintWeek, a UK-based print-industry publication - is somewhat dated – it appeared just over one month ago – it’s actually the first article I’ve found where the administrators (of GPP Capital) made a statement about SP UK being up for sale.

By Jo Francis, Friday 14 February 2014

The administrator of GPP Capital PLC, the parent company of Service Point UK, hopes to achieve a sale of the Service Point UK business by the spring.

GPP Capital PLC was placed into administration by its banks in October, following a protracted series of events involving GPP’s own parent company, Spanish firm Service Point Solutions SA (SPS), which is listed on the Madrid and Barcelona stock exchanges.

During 2013 SPS had attempted to restructure its £100m of debt, but despite shifting £25m of the debt into convertible bonds it continued to breach its banking covenants and subsequent attempts to sell the business stalled.

SPS acquired financial printer Chris Fowler International in 2008.

Service Point’s subsidiaries in the USA ceased trading (shut down) in November after the directors there decided there was insufficient time or funding to attempt a Chapter 11 or Chapter 7 process.

SPS’s shares are now suspended.  

GPP Capital owes its creditors £92.8m, of which £61.3m is owed to Lloyds Bank and £31.5m to SPS in Spain.

Service Point UK had sales of £44.9m in the year to 31 December 2011, placing it at number 50 in PrintWeek’s Top 500. The company posted a pre-tax loss of £623,000 for the year, after paying a £1.6m charge to its parent. The operating profit was £62,000. The firm’s 2012 accounts are overdue.

The business has 27 locations across the UK, with ten of those in London, and employs around 600 staff. It provides a wide range of print, document management, and print management services.

Ernst & Young began actively marketing GPP’s shareholding in Service Point UK at the start of this year, and said it was “business as usual” for the UK operation in the meantime.

The administrators provided PrintWeek with a statement, which said: “GPP, the parent company of document management and solutions firm Service Point UK Limited (SP UK), has confirmed that SP UK continues to trade on a 'business as usual' basis, with the ongoing support of its employees, customers and suppliers. 

“GPP, via its advisors, is currently undertaking a marketing and sales process with a view to identifying a suitable purchaser of GPP's shareholding in SP UK.”

 A number of both trade and private investors are understood to be interested in purchasing the shareholding in SP UK. GPP expects to be in receipt of indicative offers for SP UK shortly. Thereafter, it is expected that a limited number of parties will be invited to participate in a further round of due diligence and negotiation which is expected to conclude, with an eventual sale of the shareholding in SP UK, by the spring.”

However, any sale is likely to be complicated by Service Point UK’s defined benefit pension scheme, which has a deficit of at least £11.5m according to the 2011 accounts.

A business restructuring expert told PrintWeek: “I'd be staggered if anyone buys the shares unless the price is negligible at best. Otherwise, the pension problem needs to be mitigated in order to get this business sold - either via a pre-pack, or some other method that means there will be no further obligation from the buyer to the pension scheme."

“Comments on this thread have been closed following a formal complaint.”

This is where I found this article:

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