Planned McAleese deal 'unfair’

The proposed recapitalisation of transport group McAleese is back on track, despite an independent expert questioning its fairness.

A McAleese Transport dump truck.

The proposed recapitalisation of embattled transport group McAleese is back on track as an independent expert declared the planned deal “reasonable” even if it was “not fair”.

In a statement to the market today, McAleese (MCS) confirmed yesterday’s announcement that a shareholder vote on the deal with a consortium led by Hong Kong debt seller SC Lowy would proceed on September 19, three weeks later than initially planned.

The confirmation came after a crucial agreement was reached with SC Lowy to push back a deadline on approval from September 9 to September 23.

The commentary also coincided with the release of a report by independent expert PPB Corporate Finance on the merits of the agreement, with the adviser suggesting shareholders lend their support despite it not being fair.

PPB concluded the SC Lowy agreement was “reasonable” given McAleese would likely face bankruptcy without it.

“PPB is of the opinion that, in the absence of a superior offer, and on the basis that a shareholder does not participate in the notes offer, the proposed transaction is ‘not fair’ but ‘reasonable’, and therefore ‘in the best interests’ of non-associated shareholders, as a whole,” the group said in its report.

“McAleese requires a substantial reduction in its debt and additional capital if it is to generate any meaningful recovery in the business. Both will occur if the proposed transaction proceeds.”

The vote relates to an agreement to cancel all of McAleese’s existing senior debt in exchange for $112.3m.

The $112.3m is due to come through $16m in cash, SC Lowy’s acquisition of McAleese’s remaining senior debt of $91.3m and a future $5m to be paid by McAleese.

The deal was also to involve a $26m capital raising and a delisting of McAleese from the ASX, just two-and-a-half-years after its float.

The most obvious risk to the deal now is a separate shareholder vote on August 29, which could lead to a spill of the majority of the board.

Key shareholder Havenfresh, which owns 14 per cent of McAleese shares, wants all directors aside from Gilberto Maggiolo removed, including chairman Don Telford and chief executive Mark Rowsthorn.

The group has alleged the recapitalisation plan places “unacceptable coercive pressure” on existing shareholders.

Havenfresh is in part controlled by Mr Maggiolo.

McAleese again said today it had received no alternative proposal from Havenfresh that would address its financial woes.