By Dennise Williams, Staff ReporterBOX MANUFACTURER, West Indies Pulp & Paper (WIPP), suspended from the Jamaica Stock Exchange (JSE) since 2001, is embarking on a restructuring exercise that will see the company returning to profitability and regular
trading on the JSE.
According to Joscelyn J. Jolly, general manager and board member of WIPP, "We are in delicate discussions with local investors that upon conclusion could put us in a position to be more investor friendly and enable us to get funding for our operational activities."
Part of the restructuring exercise will be to get the approval from the JSE in order for shares to be once again actively traded. JSE General Manager Marlene Street tells the Financial Gleaner, "WIPP was suspended because of outstanding listing fees and outstanding accounts.
AUDITED REPORTS
"Right now, we have the accounts up to the 2003 audited reports. We gave them the deadline of November 30 to regularise their situation. They have submitted some documents to us and we will be reviewing them shortly. In the event that we are satisfied with their submission then the suspension could be lifted." And despite the long wait, Mr. Jolly tells us that shareholders are eager for the company to be back on active trading. Mr. Jolly states, "At this stage, WIPP shareholders have indicated a preference for shares to be re-activated and dividends paid, instead of a complete payout."
In a previous November 2003 interview, Mr. Jolly stated, "In the short term of three to six months, minority shareholders of WIPP can look forward to having their claim in the company liquidated. The four million outstanding shares will be redeemed at $0.55 per share."
One year later, Mr. Jolly tells the Financial Gleaner that the accounting firm PriceWaterHouseCoopers has been "engaged to do a financial evaluation of the WIPP group and advise on the best course of restructuring. We are in advanced discussions with our unsecured foreign debt holders. Any time now we could be making a public announcement of the restructure but it will be definitely before the first quarter of 2005."
However, in the meantime WIPP has formed a new company, WIPP Packaging Limited, which has been able to access the financial support that WIPP cannot. States Mr. Jolly, "WIPP Packaging is not a sister company but a separate company with separate investors. There is a contractual arrangement between the two
companies to provide each other support."
RAW MATERIALS
Mr. Jolly continues, "The new company was formed primarily to provide raw materials (paper) to WIPP for us to supply customers with boxes. WIPP in its present form is strapped for working capital and cannot obtain financing. The company currently has a high debt and high cost structure and so persons have been reluctant to invest."
Mr. Jolly goes on to say that WIPP converts the boxes for sale and then provides the cash for the new company to purchase raw materials.
Formed in 1962, and listed on the JSE in the same decade, WIPP in its heyday employed 110
people. However, by 2001 the company found its self in serious trouble. Mr. Jolly explains why. "The company was owned by a foreign company. It was said that they acquired faulty equipment that was scrapped from a factory in the United States. The equipment had no end of technical problems. But it was financed through debt at high interest rates. Additionally, we had a tissue mill that was affected by high operating costs and competition from imports. Now, we are still carrying the
burden of that and hence the restructuring."
Company share capital consists of 25.1 million ordinary shares. WIPP, suspended from trading on the JSE since May of 2001 was last sold at $0.55. At that time the 52-week high was $1.01 per share. WIPP's last published financial reports came out in November of 2001, reporting a loss per stock
of $4.37.
