Speaking at AWI’s annual general meeting, independent non-executive director Michael Shepherd said the company's “significant minority” investment in van Eyk has been “very disappointing” and led to unfortunate financial consequences.
“The company recorded a net loss of $6.7 million,” Mr Shepherd said. “The major contributor to this result was a revaluation of our significant minority investment in van Eyk Research.”
Mr Shepherd explained AWI’s intentions, following its acquisition of a 49.6 per cent stake in van Eyk, were to take control of the business and then integrate it into AWI.
“Our efforts to take control of the business culminated in a general meeting of van Eyk where we sought to secure board seats. We were unsuccessful and at that time, without the ability to drive an alternative strategy, decided to write down our investment,” Mr Shepherd said.
Mr Shepherd also said the events that led to van Eyk’s managed funds being terminated by responsible entity Macquarie Bank and then the company’s progression into liquidation will further impact the future of the company.
"We expect these events will impact further our current carrying value of this investment of $7.5 million. We will continue to keep shareholders informed in relation to this matter,” Mr Shepherd said.
“This investment loss is bitterly disappointing, but does not reflect the fact the overall portfolio of assets in the company at 30 June 2014 is expected to generate positive earnings going forward,” he said.
A spokesperson for AWI confirmed to InvestorDaily that Paul Clitheroe has been appointed chairman at the company’s annual general meeting, to replace Andrew Barnes who resigned earlier in November 2014.
