Greek lesson to be learned from Pindar pre-pack sale
Thursday, July 28, 2011
Pindar's sale brought to mind the financial crisis in the Eurozone, which has led to another bailout for the heavily indebted Greek government. This has rightly been termed a 'selective default' by ratings agencies, resulting in further downgrades for Greece's already junk-level bonds.
Economists have estimated that it would take up to a 70% haircut for Greece’s debt to achieve a sustainable level. The scale of the problem makes a default inevitable. The same situation has been facing Pindar, with the size of its pension deficit negating the possibility of a solvent sale. And so we have the dreaded pre-pack.
However, in this instance, I would argue the pre-pack was the only solution. Unlike Greece, which has done an ‘extend and pretend’ refinance, Pindar’s administration and the sale of its Scarborough site means that the business can now move forward on a more sustainable footing. In the process, jobs have been preserved, along with a major client of consumables suppliers, not to mention a chunk of the UK’s dwindling print history.
Hopefully, freed from the worst of its debt, Scarborough’s famous print firm will have a long and profitable future under its new owners and in so doing, I would wager, have laid the path for Greece to follow.
Simon Nias is news editor of PrintWeek