Central to the tensions at Bubs has been the company’s strategy in China and the sales performance of exclusive distribution deals that the company had inked with seller AZ Global.
Two entities associated with AZ Global, Willis Trading and Alice Trading, have backed the motion to spill the board.
“One of the requisitioners is Willis Trading, which owes Bubs a debt of $2.6 million. In addition, Alice Trading, which is owned by the same company as Willis Trading, owes Bubs a debt of $2.9 million. These entities have failed to repay the debts despite repeated demands from Bubs,” the company told shareholders.
“Some of the requisitioners have a vested interest in the failed China strategy of Bubs and propose to replace the current independent directors with directors who have pursued similar strategies at other organisations.”
But Carr and the fellow shareholders seeking new leadership accuse the current board of failing to outline a business strategy.
“The current board summarily sacked top executives and lost the support of Bubs’ founder, taking control of the board and management without a transition plan for a new CEO, CFO or business strategy,” those pushing for the spill told investors.
The group of concerned investors led by Carr, badged “Save Our Bubs”, includes Chemist Warehouse chair Jack Gance.
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“Bubs shareholders should do nothing until they have heard from Save Our Bubs on why the current inexperienced and deeply conflicted board should go and be replaced by our highly credentialed ‘Dream Team’ who can deliver a growth strategy,” the group said in a statement.
Two weeks after being installed as chair, current Bubs chairman Katrina Rathie announced a strategic review of the company’s operations that will be completed by July.
The review is led by agribusiness dealmaker David Williams, restructuring firm McGrathNicol, and Jackie Lin of C2 Capital, an Alibaba-backed private equity firm that became a major shareholder in Bubs after purchasing a 15 per cent stake and installing its managing partner Steve Lin as a board member.
Bubs’ shares closed the session 5.2 per cent lower at 18 cents.
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