Tom Sturgess buys Blue Star NZ

Former Blue Star controlling shareholder Tom Sturgess and Australian private equity firm Mercury Capital took control of Blue Star NZ from Champ Private Equity on 1 January ahead of a settlement on 11 January.

It means that Blue Star's New Zealand and Australian divisions have both fallen into the hands of former management, following Geoff Selig's acquisition of the Australian operations late last year.

Sturgess told ProPrint that he and Mercury had acquired the shares of a subsidiary of a holding company, giving them control of all the operating assets and liabilities but not the bond debt.

Sturgess, who is a Mercury board member, wouldn't disclose the size of the two parties' stakes. He also wouldn't be drawn on the value of the deal, but it is expected to be a fraction of the NZ$385 million Champ paid Sturgess for the operations on both sides of the Tasman in 2006.

All staff and suppliers will receive the money owing to them, said Sturgess. He would not comment on the bank debt.

It is thought the bank debt belongs to the holding company and not the operating company, which means senior lenders may take a haircut.

[Feature: Selig buyout promises stability]

Sturgess said he had returned to Blue Star because it was a good company that would be able to do well if it was properly managed and given a better capital structure.

"This isn't an underperforming asset. It had a capital structure that was crazy," he said.

"Fundamentally, it's a sound company with a management team I've known for a long time who I back."

Sturgess, who will serve as executive chairman, said he had no grand plans for the business: "I'm not smart enough to come up with any silver bullet solution."

He said he would be "nuts" to dismiss any of the management team, because they had done well in difficult circumstances.

He also paid tribute to what he described as the hard work and strong performance of the staff. "Those are the people I'm investing in. I'm thrilled to be back with them."

Sturgess said Blue Star would confine itself to New Zealand for the foreseeable future. He said there was no plans to change its name, which means there will be separate businesses in Australia and New Zealand bearing the same Blue Star name.

Sturgess's other companies, Rapid Labels and Tiri Group, will continue to operate independently, he said.

[Related: Ups and downs of Blue Star]

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