Next Monday, Barry O'Callaghan and his school of little fishes will hold an extraordinary general meeting to inform their stockholders that they are swimming to the Cayman Islands. Ireland is too cold for the minnow, and the warmth of the financial climate in the Caymans will do the minnow a world of good.
HM Riverdeep is going to be restructured. In search of those elusive synergies, perhaps, which would reduce the debt burden. The plan is to liquidate subsidiaries to gain $1.89 billion worth of assets. Michael McAteer has been brought on board to wind up Houghton Mifflin Riverdeep Group Holdings, Ltd. and Houghton Mifflin Riverdeep Ltd, to send some cash downstream to the part of HM Riverdeep that is high and dry.
The assets of HM Riverdeep will be transferred to Education Media and Publishing Group, where Mr. O'Callaghan will enjoy far less scrutiny than he endured in Dublin. Best of all, it will be easier for the company to make distributions to investors....that would be Mr. O'Callaghan and his colleagues, would it not?
Why make the move now, one might ask? According to a spokeswoman for HM Riverdeep, the merged entity had an "unwieldy structure" and the company wanted to "create distributable reserves in order to be in a position to do a dividend recap and return capital to shareholders."
Who are the shareholders? Mr. O'Callaghan, for the most part, and he's clearly trying to recoup some of his investment in HM Riverdeep. With the Cayman Islands best known for shady business deals and dodgy bank investments, it is looking more and more like the minnow is choking on the whale.