(Alliance News) - Both DBAY Advisors Ltd and Andrew Tinkler on Monday urged shareholders of Eddie Stobart Logistics PLC to accept their respective rescue plans for the firm.
The statements come less than a week before Eddie Stobart's shareholders vote on the respective deals, with the meeting taking place in London on Friday. On Friday last week, Eddie Stobart warned the company will face "imminent" financial difficulty if a rescue is not agreed at the meeting.
In November, DBAY, which holds 27% of Eddie Stobart, put forward a GBP55 million lifeline in exchange for a 51% stake in the entity which holds Eddie Stobart's assets.
However, a firm controlled by former Chief Executive Tinkler, TVFB, later that month came up with its own plan, which would see the logistics firm raise GBP70 million in equity.
On Monday, TVFB raised the limit of that fundraise to GBP80 million following "higher than expected demand and support from shareholders". This funding would in part be used to reduce debt, it said.
"We would encourage D-BAY, as a significant shareholder, to participate in the fundraising and support the business," said TVFB.
"Funds received would be put towards the implementation of a business plan for Eddie Stobart based on operational efficiencies, and using the expertise of Andrew Tinkler, who was chair of Eddie Stobart and CEO of the Stobart Group between February 2004 and July 2017, coupled with the existing Eddie Stobart executive management team."
Tinkler left as CEO in 2017 and was removed by the company as an executive director in June 2018. He appealed but lost in court. Tinkler's dismissal as executive director was prompted by his move to oppose the re-election of Chair Iain Ferguson.
TVFB said, as a sign of its commitment, it on Friday bought 24.7 million Eddie Stobart shares at a price of 6 pence per share. Shares in Eddie Stobart are currently suspended from trading in London, having been so since August, last trading at 6p.
DBAY, in its own statement on Monday, said: "DBAY has a long and successful history with the business and it is with regret we will be returning under these circumstances. Our belief in Eddie Stobart is reflected in the considerable effort we have put in to deliver a practical proposal and our decision to invest further, despite the problems it has faced since we stepped back from the board.
"With the new funding in place to stabilise the business, we believe the company can thrive once again. This belief is underpinned by the return of William Stobart who will support the operational management teams."
"This stability will be important to provide excellent customer service through the Christmas period and will allow the company to meet its commitments to customers and suppliers throughout this busy period," the investor added.
DBAY also made a commitment to keep Eddie Stobart listed on the London Stock Exchange, whereas TVFB has said the DBAY proposal would be the operating business under one single shareholder's control.
DBAY has also secured a new GBP20 million credit facility on top of its own GBP55 million injection. The investor, like TVFB, has bought more Eddie Stobart shares, it added, buying 62.2 million, taking its stake to 29.9%.
Referring to a previous share purchase by DBAY which took its stake to the prior level of 27%, announced Friday last week, TVFB said Monday: "TVFB believes this action was wholly hypocritical, given the DBAY proposal does not afford any meaningful value to other shareholders.
"We maintain these shares were acquired solely to increase DBAY's chances of passing resolution 1, and to increase its level of control in the event of its passing, to the detriment of other Eddie Stobart shareholders."
TVFB said its proposal is "materially better on multiple fronts" than DBAY's, whereas DBAY noted the Eddie Stobart board has expressed support for its own remedy.
By George Collard; georgecollard@alliancenews.com
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