AstralPool steps back from Poolrite

AstralPool Australia and the voluntary administrator for Poolrite Australia and Poolrite Research, SV Partners, have not been able to agree on terms for the sale of the company assets.

Consequently, AstralPool will not be buying Poolrite.

AstralPool Australia Managing Director Peter Wallace says he is very disappointed that the purchase of the Poolrite assets did not go ahead.

“Simply put, our decision not to proceed was a result of the extended delay in negotiating and trying to execute the purchase,” he says. “Our offer to the administrators was predicated on the original execution date of January, then February. The delay in execution of sale date (as a result of other late offers to purchase) devalued the business to a point where our original offer was considered too high and too risky.”

Where this leaves creditors is uncertain, as the AstralPool deal was considered the most favourable to secured creditors and staff.

SPLASH! understands the deed of company arrangement (DOCA) that was put forward by Evolve in March and bolstered by an injection of funds from Poolrite owner Ross Palmer cannot be revisited as the company is now in liquidation. The DOCA was turned down by the creditors following direction from the administrators after the banks did not look favourably upon it.

It seems the only options open to the administrator would be to continue with the liquidation by breaking up and selling the assets, or finding a buyer.

Unpaid staff will most likely need to pursue their entitlements through the Fair Entitlements Guarantee.

Evolve MD Ty Hermans says his company is considering its options and will update SPLASH! in the near future when more information is available.

Back in March, a meeting of creditors voted to liquidate Poolrite Australia and Poolrite Research and continue the well-advanced negotiations to sell the assets to AstralPool Australia. At the same meeting a DOCA proposed by Evolve and bolstered by input from Ross Palmer was turned down.

At the time some details still needed to be finalised, but all parties were confident the sale would proceed. In the end, it did not.

The primary creditor, Westpac Banking Corporation with a secured claim of more than $8 million, would not support the DOCA proposal. The liquidation and sale to AstralPool would have meant the banks got paid more quickly; and the staff were also more likely to be paid quickly and in full if the sale had gone ahead.

The AstralPool offer was worth $7.5 million, with $4.5 million to be paid on settlement, followed by two payments of $1.5 million after three months and six months. Of that, AstralPool was to pay approximately $1.7 million for stock which would have been used to pay staff entitlements. At the time of the March meeting, that offer was hoped to have been settled by May 2013.

SPLASH! will update this story when more information comes to hand.