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Australia – Bluestone announces restructure plan and appointments

17 December 2013

International recruitment firm Bluestone Global Ltd (BUE: ASX) announced today that the company has commenced a financial and operational restructuring and the appointment of a new CEO and director.

In the company’s most recent financial statement, the company reported a dramatic -14.8% fall in revenue for the year ending 30 June 2013. The company also reported a worse net loss for the year, compared with 2012.

Bluestone is a specialist labour hire, professional placement, mining services and international recruitment firm trading under three key brands: Bluestone Recruitment, ResCo Services and Ultimate Skills.

A Deed of Compromise has been reached with the Australian Taxation Office (ATO) whereby debts of AUD 28.6 million (USD 25.6 million) can be compromised with a payment of AUD 6 million (USD 5.4 million). The ATO Deed requires the company to make two payments over 12 months – comprising an initial payment of AUD 4 million (USD 3.6 million) within one month from the commencement date of the ATO Deed and AUD 2 million (USD 1.8 million) within 12 months of the commencement date.

On the final payment, the ATO will compromise the debt of AUD 28.6 million as at 1 November 2013, together with any interest charges incurred between that date and the settlement.

Bluestone Global also announced that it has entered into a Deed with Valdez Group Pty Ltd, described as a consortium of interested and experienced investors. The Deed remains conditional on a number of factors; including the receipt of regulatory approval, Board and management changes, shareholder approval, certain third party consents, and the removal of any financial risk in the option being exercised.

According to the Deed with Valdez, some of the key elements of the agreement are:

  • Valdez will take up a 15% placement in Bluestone at a price of AUD 0.008 (USD 0.007), subject to the company’s available placement capacity. The placement is conditional on Bluestone securing commitments for the addition AUD 2 million of the AUD 4 million secured loan facility.
  • Valdez has agreed to provide Bluestone with AUD 2 million of the proposed AUD 4 million secured loan facility at an interest rate of 10% p.a. payable at repayment of the loan. Bluestone requires commitments for an additional AUD 2 million in loan notes from other parties, as a condition of the drawdown. The AUD 4 million will be used to satisfy the initial payment under the ATO Deed.
  • Subject to the drawdown of the loan and the appropriate shareholder approvals, Bluestone will issue 200 million options to Valdez, as well as 200 million options to other parties taking the loan notes, with an exercise price of AUD 0.012 (USD 0.01) per option, exercisable at any time within a 24 month period from the date of the grant of the options.

On completion of the agreement, the Board will appoint Mr Anthony Kelson as a Director of Bluestone and Mr Stephen Sasse as CEO. This announcement follows numerous changes to the Executive Team and Board in the past year, which have included the resignation of seven members, including Managing Director Rabieh Krayem.

Mr Kelson has 15 years’ experience in the professional services sector having worked in the accounting and taxation field and in more recent years in various management positions and consulting on engagement structures for independent contractors. Since 2004 Mr Kelson has held the position of CEO of Freelance Global Limited, responsible for all aspects of the business including developing, implementing and reviewing the global strategic plan and preparing global and jurisdictional business plans.

The appointment of Mr Sasse as CEO will bring to a close the search the company has undertaken since July 2013 for a replacement CEO. Mr Sasse has held senior executive roles in the Leighton Group, including Leighton Holdings, John Holland and Transfield Construction.

Since July 2013 Mr Baljit Singh has taken on the role of Executive Chairman of Bluestone responsible for the daily operations of the Company. Following the appointment of Mr Sasse as CEO, Mr Singh will no longer undertake the executive role and will also step down as Chairman, remaining as a Director of the Company. At this time Andrew Plympton will be appointed Chairman of the Company.

Following the announcement, the company’s share price rose by +20% to AUD 0.006 (USD 0.005), but this still represents a fall of -85.3% compared with a year ago. Based on its current share price, the company’s market value is AUD 2.6 million (USD 2.3 million). 


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Trent Nash 04/29/2014 07:14 am

Don't mind that Anthony Kelson was the director of Freelance Global that went bust due to his management and now the ATO are auditing 100+ independant contractors who used Freelance as tax advisors. The ATO audits will date back 5 years and be over 100k in fines\amendmends for effected contractors.
Despite this, Anthony Kelson sent Freelance into voluntary administration and now gets this board deal. Will he use this money to help the sucker contractors he advised and then jumped ship on? What a joke!

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