Investor's Champion Blog
Provides refreshingly forthright, independent comment on predominantly small cap companies and specialist investment funds. Informed opinion, based on first-hand research, but pulls no punches in exposing management weaknesses.

TOREX - previous Directors were a disgrace!

So Torex has finally gone into administration with the business sold to private equity for £204m. With senior debt and transaction costs amounting to £212m, as suspected, the sale will leave nothing for creditors or shareholders. I agree with one broker’s view that this is an absolute disgrace considering the timescales and announcements made by the company as recently as January.

The new chairman’s statement that the company had “breathtaking corporate governance and financial issues at PLC level, the scale and extent of which neither I nor my board colleagues have seen in corporate life” was an absolute classic.

The results for FY06 were also finally released showing revenues of £246m and operating profit of £4.2m. This compares with the original consensus forecasts of £48m-unbelievable!

In addition to this quite diabolical operating performance, exceptional costs during the year amounted to £196m (inc. £158m goodwill impairment and £14m ‘restructuring’ costs) resulting in a headline loss before tax of £192m!

The question now is what course of action can or will be pursued against former directors responsible for this disaster


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