Crystal Amber says De La Rue turnaround ‘failed by every measure’
Activist investor Crystal Amber blasts De La Rue claiming the banknote maker’s turnaround plan has ‘failed at every measure’ as pressure on the seat mounts
- Activist investor Crystal Amber wants to oust De La Rue chairman Loosemore
- Troubled banknote maker De La Rue saw its share price drop 50% in 12 months
The La Rue investor Crystal Amber Fund has claimed the banknote maker’s turnaround plan has “failed on every count” as it is spat out that the troubled company is gaining momentum.
Crystal Amber has repeated demands for a general meeting where it will propose a resolution to dismiss De La Rue non-executive director and chairman Kevin Loosemore.
It wants Pepyn Dinandt to be appointed non-executive director and chairman of De La Rue in place of Loosemore.
This is Crystal Amber Fund’s second attempt to dethrone Loosemore in four months
“The chairman has failed to hold management accountable and protect the interests of shareholders,” Crystal Amber said in a letter to investors published on Wednesday.
‘DLR’s market capitalization is now £100 million after the £100 million equity investment, so on a comparable basis the entire pre-money market valuation of £125 million has been destroyed.
“Since March 2021, the DLR share price has fallen by 75 percent.”
De La Rue Shares were down today, falling 0.82 percent or 0.41p this morning to 49.99p, after falling more than 50 percent in the past 12 months.
Crystal Amber claimed that De La Rue’s ‘failure’ to renegotiate its bank covenants in renewing its banking facilities following talks to pay Portals £20m to cancel its paperwork commitments ‘represents a gross breach of stewardship’ .
It added: ‘DLR therefore still incurs significant additional and avoidable costs. This culminated in November 2022 with an audit qualification of an audit with a material uncertainty.”
The activist investor said he believes De La Rue should have sold, but simply shut down its operations in Kenya.
It added: ‘We understand that a sale could have generated cash proceeds of up to £10m which would help to reduce debt. Closure has also negatively impacted commercial opportunities in this established region.”
Crystal Amber also said today that it believes De La Rue’s chairman fails to monitor fees paid to professional advisers, including but not limited to Rothschild & Co., Slaughter & May and Brunswick PR.
It read, “Crystal Amber is asking the board to provide shareholders with a breakdown of these material costs.”
Pepyn Dinandt, chief executive of the climate control systems and car controls division at the Eberspaecher Group, said: ‘The past two years have been disappointing and costly for a once proud, great British company.
“The responsibility lies with the leadership. I believe that if we act quickly, with focus and operational execution, DLR can recover and prosper. It is now up to DLR’s long-suffering shareholders to decide whether to endorse this dismal record or end this spiral of destruction of shareholder value.”
Crystal Amber, the third-largest shareholder in the London-listed company, has a nearly 10 percent stake in De La Rue.
De La Rue has struggled since 2018, when it lost the lucrative contract to print British post-Brexit passports to a French company.
Loosemore was re-elected at last year’s annual general meeting in July and survived an attempt to impeach him in December when he was backed by nearly 83 percent of investors at a shareholder meeting convened by Crystal Amber.
The feud between Crystal Amber and the company intensified in November after De La Rue posted its third profit warning in a year.
Crystal Amber founder Richard Bernstein described the warning as a ‘Liz Truss moment’ for Loosemore – referring to the former prime minister’s short and difficult tenure, who stepped down after just six weeks.