Blue Sky CEO no longer required

Written on the 11 June 2019 by Business News Australia

Blue Sky CEO no longer required

Blue Sky has announced it no longer requires a CEO and has said farewell to Joel Cann (pictured) in a rather unceremonious fashion.

Blue Sky, currently in receivership since 20 May, released the news in a curt announcement to the ASX.

As a result, CEO Joel Cann left Blue Sky last Friday. Cann was only in the position of CEO for just over two months at the time the company went into receivership.

The Brisbane outfit's fate had been on a knife's edge after it failed to meet its loan conditions with US heavyweight Oaktree Capital.

KordaMentha is the group's receiver and manager, while Pilot Partners has been appointed as voluntary administrator.

The receivership came after Oaktree decided to enforce its rights under the convertible note facility entered into by Blue Sky, with KordaMentha noting its appointment is necessary if Blue Sky is to maintain its investment teams, key clients and stabilise the operations and capital structure of the business.

In 2017, Blue Sky was one of Brisbane's top 25 listed companies with a market capitalisation of more than $500 million, but in March last year the group's fortunes turned after a research report from Glaucus in the US raised suspicions about "wildly exaggerated" fee assets under management.

At the time BLA shares were trading around the $11.50 mark, but as the share price plunged the fallout led to two board purges and the resignations of managing director Robert Shand, and chairman John Kain along with other board members.

Anticipation around rescue packages led to a slight rebound in the share price last year, but it was short lived and the stock continued its steady decline. BLA shares last traded at $0.185 on Friday.

This final trading level is around 10 per cent of the $1.87 per share conversion condition under the deal with Oaktree, which gave Blue Sky a $50 million lifeline in September last year.

A significant restructuring took place in the first half of FY19, including the closure of its hedge fund business, an exit from its retirement living portfolio and the sale of its residential development sites.

Despite these efforts to resurrect the balance sheet, Blue Sky reported an underlying net loss after tax of $25.7 million for the first half of FY19, down by $41.8 million from its profit at the end of 2017.

Read More: The rise and fall of Blue Sky: A timeline from ASX powerhouse to pariah

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