Atlas Pearls in restructure

Shares in Western Australian aquaculture player Atlas Pearls and Perfumes fell dramatically today as the company announced a restructure, including the resignation of executive chairman Stephen Birkbeck.

It will also pull back from diversification plans, with a refocus on its core pearling business.

This includes the sale of part of its subsidiary Essential Oils Tasmania to Westwood Properties, with the company negotiating a partial advance of Westwood's cash payment. 

Joseph Taylor has additionally resigned from a board position, while current director Geoff Newman will assume the role of chairman.

The company said a reduction in revenues forecast for this year caused by lower than normal pearl sizes would affect its liquidity.

“The pearls due to be harvested over the next six to 12 months will attract a lower valuation as the average size per loose pearl is anticipated to be lower than in FY2014,”it said in a release today.

“This fair valuation adjustment or mark-to-market will reduce the carrying value of oysters and negatively impact the consolidated statement of profit or loss and other comprehensive income; it does not affect the group’s normalised EBITDA.

“Although the company has not yet breached lending covenants, it is unlikely to be compliant with its normalised EBITDA covenant at year-end.”

Atlas said it had taken steps to address that, including the extension of its debt facility until the end of the financial year and negotiating with its lender for more suitable terms in the upcoming year.

It also secured a $500,000 bridging loan from Jingie Investments at a rate of 7 per cent.

Jingie is a related party of Atlas director Tim Martin, who also serves as managing director of Coogee Chemicals and is the son of Perth businessman Gordon Martin.

Mr Birkbeck was noted in former deputy prime minister Tim Fischer’s book Outback Heroes, christened by Mr Fischer as the Sultan of Sandalwood for his success founding sandalwood exporter Mt Romance.

Atlas was down 28.5 per cent to 5 cents per share at the time of writing.