Blue Freeway set to go private

Blue Freeway’s turbulent two years on the ASX seems set to end, following an announcement to the Australian Stock Exchange of a proposal to take it private.  

The company has been in a trading halt since last week, and the move is not entirely unexpected, given Blue Freeway’s depressed share price.

In a note to the ASX, Blue Freeway’s company secretary Richard Shaw said:

“BlueFreeway has been approached by its major shareholder, IPMG, to discuss a proposal to privatise the Company. The proposal is conditional on a number of specific conditions being met including the renegotiation of earn outs with certain portfolio companies. IPMG currently holds approximately 73% of BlueFreeway voting shares, $11 million in secured debt and $7 million in secured convertible notes. The company’s independent director is considering the proposal. It should be noted that there is no certainty at this point that a transaction will eventuate.”

When Blue Freeway floated in October 2006 it was capitalised to the tune of $60m, but its share price declined to about a tenth of that. Last month it declared a $14.6m loss, which it partly blamed on “earn-out obligations previously struck at top-of-market conditions”.

A spokesman said today: “There are exceptional companies and people within the Blue Freeway group. The reality is that the current balance sheet does not provide this group with strong foundations for the future. Blue Freeway is working with financiers to put appropriate structures in place to improve this situation.”

Companies within Blue Freeway’s portfolio include MassMedia, Holler, Blackglass and JSA Digital, plus PR firms Max and Spectrum.

After the dramatic departure of founder Richard Webb at the beginning of last year, IPMG, owned by Michael Hannan, took a major stake in the company.


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