Silver Chef shares halted as it negotiates with major shareholder The Blue Stamp Company

Silver Chef chairman Allan English. Lyndon Mechielsen/The Australian

Silver Chef has entered a trading halt as it remains in negotiations with major shareholder The Blue Stamp Company.

It comes after the cash strapped group (SIV) shelved plans for a sale to Next Capital because BSC, which owns 19.99 per cent of Silver Chef, said that it would vote against the deal.

Instead, BSC has put forward an alternative proposal for the company to raise $50m at 31c a share to repay $35m of debt.

However, much of the company’s future rests on the stance of the Australian banks which are currently negotiating with the company over its debt.

BSC and Silver Chef remained in talks Wednesday morning with no decision at that time as to how the company would proceed.

Should another party come forward with an alternative proposal to that of Next Capital to buy more than 50 per cent of the business in the next 12 months, Silver Chef will be forced to pay a break fee to Next Capital.

If banks call in the loans, the hospitality lender says it is uncertain it would be able to continue as a going concern.

Next Capital was offering 70c per share for the business, despite its net asset value being $2.02.

Silver Chef founder and chairman Allan English owns 23 per cent of the financier and was backing the Next Capital deal, in which he would roll his equity into the business, but his shares were subject to a separate vote with respect to the Scheme of Arrangement.

BSC, run by Luke Trickett, husband of former Olympic swimming gold medallist Libby Trickett, is also calling for new directors to be appointed.

The independent expert for the Next Capital takeover proposal said the underlying value for Silver Chef was in the range of 90c to $1.13 and that the Next Capital offer was not fair but reasonable.

Silver Chef was founded by Brisbane entrepreneur Mr English in 1986 and was floated in 2005.

Before the bid, it had been embarking on a turnaround program to return the business to one that focuses solely on its reliable hospitality-only business model and exit its Go Getta equipment service provider operation.

It has been in debt default since June last year, when it owed more than $300m to its lenders.