3rd Aug 2009 11:15
3 August 2009
Dawson Holdings PLC
("Dawson" or the "Company")
Administration of two subsidiaries trading as Dawson News, being Surridge Dawson Limited and Solent SD Limited
Remaining businesses continue to operate
Introduction
Dawson today announces that the two subsidiaries, Surridge Dawson Limited ("Surridge") and Solent SD Limited ("Solent"), that operate the Company's UK newspaper and magazine wholesale distribution business ("Dawson News"), have been placed into administration ("Administration") by their respective directors.
For clarity, the Company and its three remaining businesses, being Dawson Media Direct Limited, supplying newspapers and magazines to airlines, Dawson Books Limited, supplying books to academic institutions and Dawson Marketing Services Limited, the fulfilment business, all continue to operate successfully and are unaffected by this.
Dawson also announces that the directors of Surridge and Solent have been negotiating potential sales of certain of the assets of Surridge and Solent ("Disposals"). Such Disposals have been completed and executed by the administrators of Surridge and Solent today. The board of Dawson ("Board") does not believe that there is any likelihood of Dawson receiving any consideration from the proceeds of the Disposals as the quantum of consideration for such Disposals will be less than the aggregate amount owed to the creditors of Surridge and Solent.
Reasons for the administration
Since 12 March 2009, Dawson has announced that a number of publishers have notified Surridge that they did not intend to renew their contracts when those contracts expire. As a consequence, the Board undertook a detailed review of the implications of those contract losses for Dawson and its subsidiaries ("Group"). The Board concluded that the Group should undertake a reorganisation to align more closely the operational and legal structures of the four principal businesses of the Group and to allow them to operate independently of each other ("Reorganisation").
As announced on 28 May 2009, the Group effected the Reorganisation which resulted in Dawson News being the only significant business to remain in Surridge. The Board further concluded that Surridge and Solent had no viable alternative other than to seek an orderly exit from the magazine and newspaper distribution market. The directors of Surridge and Solent have sought to achieve such an orderly exit and to maximise returns to creditors of Surridge and Solent through the Disposals. Following negotiations, it became apparent that Surridge and Solent would have to be placed into Administration as the directors of Surridge and Solent came to the view that they were now no longer solvent and they needed to effect the disposals quickly to avoid disruption to the Dawson News business.
The Continuing Group
As noted above, the continuing Group comprises three strong stand-alone businesses, Dawson Media Direct, Dawson Books and Dawson Marketing Services.
As disclosed at the time of the interim results announcement on 28 May 2009, the administration of Surridge signals the start of a 180 day period during which the banking facilities and security arrangements (including cross-guarantees) of the remainder of the Group will need to be renegotiated. The directors of Dawson have no reason to doubt that the banking facilities made available to the continuing Group as the outcome of those negotiations will be similar to those agreed on 28 May 2009, which have sustained that part of the Group since that time.
As reported in May 2009, in the Group's interim results for the 26 weeks ending 28 March 2009, these three businesses traded profitably. They have continued to trade normally and independently throughout the period of disruption for the Group and the Board is confident that they have good market positions and prospects for the future, both individually and collectively.
An update on current trading, including the impact of the Administration and Disposals, the financial position of the Group and the performance of the continuing businesses will be provided when Dawson issues its interim management statement for the period 29 March 2009 to 13 August 2009 on 14 August 2009.
Commenting, Nigel Freer, Chairman, said:
"Regrettably there is no viable alternative for Dawson News other than its administration announced today. However, our three continuing businesses carry on trading normally and we have great confidence in their future."
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For further information, please contact: |
www.dawson.co.uk |
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Dawson Holdings PLC |
020 3167 4128 |
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Hugh Cawley, Chief Executive |
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Adrian Wood, Group Finance Director |
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Altium Capital |
020 7484 4040 |
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Ben Thorne / Melanie Szalkiewicz |
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Shore Capital and Corporate Limited |
020 7408 4090 |
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Dru Danford |
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Smithfield |
020 7360 4900 |
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Reg Hoare / Rebecca Whitehead |
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