Charlie's looking at 'all' options

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CONSIDERING OPTIONS: Charlie's is in talks with other industry players about its options, which include the full sale of the company. Pictured: Charlie's director Marc Ellis.

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Juice maker Charlie's Group says it's talking to other industry players about options for the business.

Asked today if Charlie's board was considering a full sale, capital raising or an asset sale, chief executive Stefan Lepionka told BusinessDay the company had been approached and was "looking at all options".

Lepionka added that Charlie's, which has a market capitalisation of $31.9 million, was in talks with "trade industry players about options". BusinessDay understands Charlie's is being advised by ABN Amro Craigs.

Charlie's, which posted a $661,000 loss for the six months to December, revealed in its interim report that it was in breach of "certain" bank covenants as of December 31, 2008. However, Charlie's said its bank, ANZ, had subsequently waived these breaches.

Cottisloe Holdings Ltd, the company which owns Charlie's 19.69 percent shareholder, Collins Asset Management, had provided an additional guarantee to the ANZ for the group's $1.5 million bank facility. Charlie's said its next covenant test date was September 30 this year.

Cottisloe's owners include Charlie's director, Tim Cook.

Meanwhile, Charlie's is battling alcopops group Independent Liquor in the High Court at Auckland today in a trademark dispute.

Lepionka said Independent Liquor had launched an alcoholic beverage called Phoenix Cider in December last year and attempted to trademark the name, arguing it did not infringe on Charlie's non-alcoholic Phoenix brand.

Although he felt the case was "effectively won" as Independent Liquor had withdrawn its Phoenix Cider from the market, Lepionka said Charlie's wanted to ensure its trademark was protected from any further infringements.

"We're just making sure all the T's are crossed and I's are dotted... [Independent Liquor] is dragging the chain so we're proceeding as normal to make sure everything is in order," said Lepionka.

Independent Liquor's marketing manager Richard Casey said the company had withdrawn the Phoenix Cider brand due to poor sales.

Phoenix Organics was founded and trademarked 21 years ago and bought by Charlie's for $10 million in December 2005.

Last year Charlie's, co-founded by Lepionka and former All Black Marc Ellis, stepped up promotion of its brand in Australia after establishing production facilities in South Australia.

In a trading update at last November's annual meeting Charlie's chairman Ted van Arkel said group earnings before interest, tax, depreciation and amortisation (ebitda) for the four months to October were $328,000, a significant turnaround on the previous year's interim loss before interest, tax, depreciation and amortisation of $377,000.

However, Charlie's then revealed in its half-year results, released in February, that earnings had in fact been erroneously inflated by the firm's new IT system.  Charlie's had in fact produced a loss before interest, tax, depreciation and amortisation for the six months to December of $83,360. The errors were rectified with the help of auditors PricewaterhouseCoopers and Charlie's IT provider.

Charlie's advised the sharemarket last Friday that it was in search of a new chief financial officer, with current CFO Nicky Ellingham due to step down in September to have her first child.

- © Fairfax NZ News