In his remarks to shareholders, SHL Chairman William Midon stated that, "The structure of the original acquisition of CHIPS Ltd. has hampered the ability of the company to successfully realize the value of its investment in Staples ltd. and CHIPS ltd. Despite numerous efforts and initiatives, the cash outflow for debt repayment and to our preferred shareholders of approximately $4.4 million over 3.5 years has crippled the company and given them no resiliency."
A number of challenges faced the company from its inception four years ago. The first of these was the loss of the acquired company's senior management team and their subsequent start-up of competitor TOPS Ltd. within the first four months, resulting in some loss of established CHIPS business. The drain on financial resources from the capital structure and acquisition debt as well as people and systems problems were additional challenges the company has faced within the past 24 months.
"We have relied on expert guidance at all stages of the process," reported the Chairman, "despite this, we have never been able to achieve profit levels sufficient to support SHL's requirement, as evidenced by our audited statements, which show three years of declining performance."
The meeting concluded with Chairman Midon assuring shareholders that "all options available to us to maximize the value of the operating subsidiaries, thereby minimizing the impact on shareholders, will be vigorously pursued." Further information on the Company's next course of action is expected within weeks.