From today's Renaissance AGM, it's clear that the directors believe the worst of the company's headwinds are now over.
Although it's clear the company's financial position is still difficult, the company has experienced a little light relief with a further Christchurch Earthquake insurance payout totaling $870,000, and has managed to reduce its capex spending by $300k. An additional $3.1 million is expected from insurers; in the meantime the company remains in default of its banking covenants with the BNZ bank.
The most significant news from the AGM was the announcement that the sale of the distribution business is going ahead, with two written proposals received. Because of clauses in the Apple distribution agreement and the significant security required for a credit account with Apple Australia, the new buyer isn't guaranteed Apple distribution, which is complicating the sale process. Essentially, both proposals are now with Apple Australia to select their preferred partner, and negotiations will start after that.
If the sale of the distribution business goes ahead, it would put the company back on a strong financial footing and enable it to focus on the growth opportunities in its retail and education/training businesses.
Independently of the company's AGM, four members of the distribution team are now being consulted about the possible redundancy of their positions. Similar rounds of consultation occurred prior to Christmas, with no redundancies ultimately occurring.
Who are the bidders? Will they get Apple approval? Would you buy RNS shares as a result?