Irish shareholders' stake in IPL Plastics plunges by €85m
Irish investors will be allowed to trade shares in December after IPO lock-in
Irish shareholders in IPL Plastics are facing a potential loss of €85m when a six-month lock-in expires late next month.
Shares in the company, which was formerly known as One51, were trading at CA$13.50 (€9.00) when they listed on the Toronto Stock Exchange in June.
However, the shares have fallen by 40pc which does not bode well for the 2,000 Irish investors in the company.
The Irish shareholders, a mix of co-ops and individuals, hold a 45pc stake in the firm, which has been transformed from an investment company into a plastics company over the past five years. The other major shareholders are Canadian firms Caisse de Dupot et Placement du Quebec (CDPQ) and Fonds de Solidarité.
It is understood that a number of issues are weighing on the share price.
Resin price inflation has dragged down stocks in the plastics sector. It is also understood that at least one short seller has taken a position on the company.
The listing of IPL was hailed as a solution to the long-running liquidity issue at the company. Many co-op shareholders inherited stock in the company via their original holdings in IAWS, out of which One51 was spun.
But other investors backed a boomtime vision outlined by former CEO Philip Lynch, who invested in everything from Irish Continental Group to metal recycling.
However, a long-promised 'liquidity event' took far longer to materialise than hoped.
Current CEO Alan Walsh took over from Lynch and focused on developing the company as a plastics business, selling off non-core assets.
In recent years shareholders have included financier Dermot Desmond, Larry Goodman and Pageant Holding, while Cavan dealmaker Seamus Fitzpatrick made two attempts to buy the company, the most recent one not long before the IPO. Notes at the time of IPL third-quarter results in November were generally upbeat. Davy said: "We are hopeful the worst is now over with some signs of resin price stabilisation."
But even reports of a possible merger with Dutch firm Schoeller Allibert have not boosted the share price.
When the company listed in June it has a market capitalisation of CA$724m and 53.6m shares in issue.
This has fallen steadily since September to CA$439.5m, a drop of CA$284m (€190m), with Irish shareholders taking a paper hit of €85m on their 45pc stake. They can sell their shares from December 28.