Crystal Amber says De La Rue turnaround ‘failed by every measure’

De La Rue investor Crystal Amber Fund has claimed the banknote maker’s turnaround plan has ‘failed by every measure’, as it’s spat with the troubled firm gathers pace. 

Crystal Amber has reiterated demands to convene a general meeting where it will propose a resolution to remove De La Rue non-executive director and chairman Kevin Loosemore.

It wants to see Pepyn Dinandt appointed as De La Rue’s non-executive director and chairman in Loosemore’s place. 

This is the second attempt by Crystal Amber Fund to unseat Loosemore in four months

‘The Chairman has failed to hold management to account and protect shareholders’ interests’, Crystal Amber said in the letter to investors published on Wednesday. 

‘DLR’s stock market value is now £100million, after the £100million equity investment, so on a like for like basis, the entire £125million pre-money stock market valuation has been destroyed.

‘Since March 2021, DLR’s share price is down by 75 per cent.’ 

De La Rue shares fell today and were down 0.82 per cent or 0.41p to 49.99p this morning, having fallen over 50 per cent in the last 12 months.  

Crystal Amber alleged that De La Rue’s ‘failure’ to renegotiate its banking covenants when renewing its banking facilities following discussions to pay Portals £20million to exit its paper commitments, ‘represents… a gross failing of stewardship.’

It added: ‘Consequently, DLR is still incurring substantial additional and avoidable costs. This culminated in November 2022 with a material uncertainty going concern audit qualification.’

The activist investor said it believed De La Rue should have sold rather simply closed its operations in Kenya. 

It added: ‘We understand that a disposal could have realised cash proceeds of up to £10million, helping to reduce debt. Closure has also adversely impacted commercial opportunities in this long-established region.’

Crystal Amber also said today that it believed De La Rue’s chairman is failing to control fees paid to professional advisers including but not limited to Rothschild & Co., Slaughter & May and Brunswick PR. 

It said: ‘Crystal Amber asks the board to provide shareholders with a breakdown of these material costs.’

Pepyn Dinandt, chief executive of the climate control systems and automotive controls division at the Eberspaecher Group, said: ‘The last two years have been a disappointing and costly one for a once proud, great British company. 

‘The buck stops with the leadership. I believe that if we act quickly, with focus and operational execution, DLR can recover and thrive. It is now for DLR’s long-suffering shareholders to decide if they wish to condone this woeful record or seek to end this spiral of destruction of shareholder value.’

Crystal Amber, the London-listed company’s third-biggest shareholder, has a near 10 per cent stake in De La Rue. 

De La Rue has been struggling since 2018, when it lost the lucrative contract to print Britain’s post-Brexit passports to a French company. 

Loosemore was re-elected at last year’s annual general meeting in July and survived an attempt to oust him in December, when he was backed by nearly 83 per cent of investors at a shareholder meeting called by Crystal Amber.

The row between Crystal Amber and the company intensified in November after De La Rue reported its third profit warning in a year. 

Crystal Amber’s founder Richard Bernstein described the warning as a ‘Liz Truss moment’ for Loosemore – referencing the short and troubled tenure of the former prime minister, who quit after just six weeks. 

This post first appeared on Dailymail.co.uk