Murray Radford to stay on Bethunes board, after founder John Mowbray walks
Bethunes Investments' [NZX: BIL] outgoing chairman Murray Radford will stay on the board of the auction house formerly known as Mowbray Collectables after founder John Mowbray declared his resignation as director yesterday.
Earlier this month Mr Radford said he would resign after 15 years as a director, having signalled 12 months earlier he would be stepping down to refresh the board and deal with health issues. Today the Wellington-based auction house said Mr Radford would stay on the board until the end of its deeply discounted rights issue because otherwise Mr Mowbray's departure would cause a breach of NZX listing rules.
"After considering the serious consequences for Bethunes that Mr Mowbray's decision to resign creates, Mr Radford has agreed to withdraw his own resignation as a director," the company said. "Mr Radford's intention is to leave the board following the conclusion of the proposed rights issue."
Bethunes changed its name after founder Mr Mowbray bought subsidiaries Mowbray Bethunes and Wildlife Philatelic for $950,000, leaving the company with auctionhouse Webb Galleries as its sole trading entity. The auction house has been something of a disappointment for the struggling antiques business. Since it took full control of the auction house last year it has underperformed forecasts presented during the valuation, forcing the company to concede in November "that the purchase price of the 51% was too high."
On Monday the company announced it was looking to raise between $1.5 million and $2.87 million via a 15-for-one renounceable rights offer, priced at 1.5c per share, which at the time represented a 93% discount to its 20c share price. The share price has since tumbled some 60% and last traded at 8c, according to NZX data.
The directors want a new investor because Mr Mowbray, who owns 40% of the stock, said he won't take part in the rights issue. The company will use the cash injection to help keep Webbs Auction, which is carrying $1.15 million in term debt and working capital overdraft, afloat.
"Bethunes simply has too great a debt burden for a small company, particularly given the volatility that Webb's [its only trading subsidiary] is currently experiencing in the auction market, coupled with the sizeable business interruption from moving premises, which has impacted the number of auctions held calendar to date," the company said on Monday. "Bethunes needs to address Webb's debt burden to provide time and breathing space if it wishes to maximise value for Webb's in the future or pursue other options such as a sale of Webb's (in which case there is no guarantee the proceeds would be sufficient to discharge the current debt burden in full)."
Annual losses widened to $2.95 million in the year ended March 31, from a loss of $112,000 a year earlier, while sales rose 39% to $2.3 million.
Christopher Swasbrook is set to act as chairman until a replacement for Mr Radford is found.