Crystal Amber Fund Limited Crystal Amber requisitions De La Rue plc GM
March 31 2023 - 2:00AM
RNS Non-Regulatory
TIDMCRS
Crystal Amber Fund Limited
31 March 2023
Reach announcement*
31 March 2023
CRYSTAL AMBER FUND LIMITED
("Crystal Amber", the "Company", or the "Fund")
Crystal Amber Fund Limited requisitions general meeting at De La
Rue plc to replace Chairman and appoint a new director as
Chairman
Crystal Amber, the activist investment fund, announces that it
has sent to the board of De La Rue plc ("De La Rue") a requisition
notice requiring De La Rue to convene a general meeting at which a
resolution will be proposed to remove Non-Executive Director and
Chairman Kevin Loosemore ("the Requisition"). The Requisition also
proposes to appoint Pepyn Dinandt as a Non-Executive Director and
Chairman. Details relating to Pepyn Dinandt are set out below in
Appendix 1.
Background and reasons for the Requisition:
1. Since 2018, Crystal Amber has been a shareholder in De La
Rue. Crystal Amber currently holds approximately 9.8% of the total
issued share capital of De La Rue.
2. Crystal Amber notes that De La Rue's current market
capitalisation is GBP103 million. This is after the July 2020
equity fundraise of GBP100 million, meaning that since July 2020,
the like-for-like valuation of the business has fallen to GBP3
million. Prior to the fundraise, the market capitalisation was
GBP125 million.
3. Crystal Amber notes that on page 14 of De La Rue's interim
results released in November 2022, a reference was made to a
material uncertainty going concern audit qualification. This
relates to potential banking covenant breaches.
4. Crystal Amber notes that in December 2022, it wrote to the
directors of De Le Rue in a personal capacity. In that letter,
Crystal Amber highlighted several specific concerns, including the
effect on revenues and profits of making 300 staff redundant at the
Kenyan print facility and ceasing print operations. The directors
of De La Rue wrote to Crystal Amber to deny this. However, on 20
January 2023, De La Rue announced the closure of its Kenyan print
facilities. Whilst the announcement said that this closure was not
expected to affect revenues to 31 March 2023, it made no reference
to the effect on revenues for the year commencing on 1 April 2023.
Prior to the closure of the Kenyan print facilities, the revenue
from Kenya comprised around 12% of total revenues from the Currency
division of De La Rue.
5. Crystal Amber notes that in the period to 26 March 2022,
after the GBP36 million cost cutting, De La Rue's pre-tax profits
from continuing operations were GBP24.2 million. The current market
consensus estimate for the year to 31 March 2023 for De La Rue is
for pre-tax profits of GBP22 million.
6. Crystal Amber believes that unless it takes immediate action,
De La Rue's audit report for the year to March 2023 is likely to
include a material uncertainty going concern qualification. This
could have an adverse impact on De La Rue, not only as regards
tendering for new contracts but importantly for retaining existing
customers and contracts.
7. Crystal Amber believes that an immediate change of leadership
is required. Therefore, it has concluded that it is necessary to
replace Non-Executive Director and Chairman Kevin Loosemore.
Crystal Amber believes that Pepyn Dinandt should replace Kevin
Loosemore as Non-Executive Director and Chairman. Further details
relating to Pepyn Dinandt are set out below in Appendix 1.
8. Crystal Amber notes that De La Rue has a rich history and
long-established reputation within banknote printing. With a broad
range of central bank customers, it is naturally placed to lead
industry growth, given the right strategy and operational
execution. This Requisition seeks to honour these characteristics
and the strategic value they give to De La Rue and to protect them
for De la Rue's shareholders and stakeholders.
Appendix 1
Pepyn Dinandt has spent almost 20 years working on behalf of and
with private equity firms including KKR, Apollo and Towerbrook. He
has a long and successful track record in building businesses by
delivering on value creation programs and securing exits. He is
currently Chief Executive of the Climate Control Systems and
Automotive Controls division at the Eberspaecher Group, a very
large family-owned Tier 1 automotive supplier. By the end of 2023,
this global division is forecast to have approximately EUR900
million revenues and 3,500 employees.
For further enquiries please contact:
Crystal Amber Fund Limited
Chris Waldron (Chairman)
Tel: 01481 742 742
www.crystalamber.com
Allenby Capital Limited - Nominated Adviser
David Worlidge/Jeremy Porter/Dan Dearden-Williams
Tel: 020 3328 5656
Winterflood Investment Trusts - Broker
Joe Winkley/Neil Langford
Tel: 020 3100 0160
Crystal Amber Advisers (UK) LLP - Investment Adviser
Richard Bernstein
Tel: 020 7478 9080
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