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Blue Star MD resigns

Blue Star's managing director Chris Mitchell has resigned, a further blow to the company's bondholders who have been pinning their hopes for the company's return to profit on the strategy Mitchell put in place.

Thursday, September 15th 2011, 11:30AM 1 Comment

by Jenny Ruth

His resignation comes just over a month after bondholders voted for a controversial restructuring which saw bondholders relinquish significant rights and exchange the $137.3 million in principal and interest they were owed for a package with a net present value of $44 million with no certainty even that return can be achieved.

Mitchell, who actively campaigned for a "yes" vote ahead of the August 10 meeting, will depart on November 11.

Mitchell, who is a Blue Star shareholder and who joined the company in July 2008, told ahead of the vote the company's forecasts showing it would return to profit in the year ending June 2012 for the first time since its 2007 financial year were "solid."

"We've got a good plan. We've got a good company," Mitchell said then.

"The board is not contemplating any change to Blue Star's strategic direction as a consequence of Chris' resignation," the company says.

Its board "wishes to express its appreciation for the significant contribution Chris has made, both in managing the business during an extremely difficult period and in formulating a new strategic direction for Blue Star."

It says it has begun a search for a new managing director and has appointed chief financial officer Graeme Archer acting chief executive in the meantime.

Bluestar's restructured bonds, which will earn zero interest until July 2013 from when they will start earning 9.1% a year, last traded on September 8 at 12 cents in the dollar.

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Comments from our readers

On 16 September 2011 at 11:17 am Ron Palmer said:
Ned Kelly's right hand man has absconded. Just wait now for the receivers and the remaining assests (after the banks) to be divide up among the shareholders. Money that should have gone to Bond holders. Those who were sucked must still believe in the tooth fairy
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