Shares in WA pub owner Compass Hotel Group slumped after it resumed trade following a near seven-month hiatus, as it revealed it had not secured a proposed recapitalisation plan.
Compass had enacted a trading suspension in July last year after the shock resignation of its chairman, managing director and non-executive director.
Shares today had plunged as much as 37.5 per cent, or 1.5c, to a low of 2.5c before rising to 2.7c at 14:34 AEDT.
During its share trading hiatus, Compass has appointed interim board members, identified suitable long-term executive directors and defined a recapitalisation strategy.
Corporate advisor BBY had put forward a racapitalisation and corporate restructure proposal and had narrowed down a final list of suitable candidates.
"It was intended that following completion of the advanced stage, the parties would submit a final proposal for the board and [financier St George Bank] to consider the submissions (Compass assessing the equity component and any commercial terms and the debt component being reviewed by the bank)," Compass said today.
"Unfortunately, the final proposals received failed to meet one or more of the material criteria.
"Despite a commercial arrangement not being achieved at this point, discussions are continuing with the preferred parties on specific terms that the board anticipates will result in a suitable arrangement for all stakeholders."
Compass today also revealed that revenue for the first half of 2009/10 had fallen to $33 million from $40.8 million reached in the previous corresponding period.
The company said fierce competition in the bottle shop and drive-through markets are affected revenues, but added the division is a low contributing segment to its overall business.
Earnings before interest, tax, depreciation and amortisation rose from $2.7 million to $4.3 million.
