Charlie's chief juiced by market debut

Business partners Marc Ellis (left) and Stefan Lepionka enjoy a tall glass of their product. Picture / Kenny Rodger

High-profile juice company Charlie's made its debut on the sharemarket yesterday after its convoluted reverse takeover by Spectrum Resources was approved by shareholders on Wednesday.

The shares, which opened at 15c, closed 2c lower at 13c.

Charlie's chairman Brent King - also managing director of major Spectrum shareholder Dorchester Pacific - was pleased with Charlie's first day on the market.

"It's saying the market likes the story," he said.

Spectrum bought Charlie's - run by former All Black Marc Ellis and his business partner Stefan Lepionka - for $11.66 million by issuing 145.75 million shares at 8c each to Charlie's shareholders, including Ellis and Lepionka.

The deal sees all $1.75 million of Spectrum's funds used to settle Charlie's debts and improve margins.

Charlie's shareholders now hold 82.62 per cent of the company, with Spectrum's 2700 existing shareholders, including Dorchester Finance and Michael Stiassny, left with the rest.

Shareholders at Wednesday's meeting also approved a private placement of 30 million new 10c shares to raise $3 million to develop Charlie's distribution.

King said with Charlie's shares trading yesterday above the 10c price of the placement, "the market is still pricing the transaction at premium. It still likes the story, it's still up 30 per cent above that."

But Bruce Sheppard, of the Shareholders' Association, who opposed the deal, said Spectrum had bought "a well-squeezed orange".

He was critical of independent appraisers Horwath Porter Wigglesworth's "overcooked" valuation of Charlie's, which was dependent on the company achieving its 2007 forecasts for $1 million profit on $16.2 million revenue. Charlie's lost $431,000 in the March year.

Furthermore, Sheppard said, the deal left Charlie's shareholders with too much of the new company.

With Spectrum's market value of $3.5 million, the $3 million being raised by the placement, and Charlie's $11 million value, the rejigged company should be worth about $17 million with Charlie's shareholders holding about 64 per cent.

However, Charlie's shareholders were ending up with about 83 per cent of the company.

"Shareholders have been skimmed by $3 million," he said.

- NZPA