When good things happen at Destra Corporation, the staff ring bells around the office. Founder Domenic Carosa calls them the bells of success and says it is an integral part of the company’s culture. But Carosa was not ringing any bells at Destra last week.
He saw his shareholding in Destra decimated after being caught up in the collapse of stockbroking firm, Opes Prime.
Carosa told SmartCompany his shareholding had been reduced in Destra from 3% to less than 1% retaining just 1,825,224 million shares. “I had 10 million shares in Opes: that’s just where my broker decided to put them. And now the shares are in (Opes receiver) ANZ’s hands.”
Opes Prime was one of just a handful of firms that would lend money secured against shares in small listed companies. Casosa doesn’t blame his broker. And he feels that shareholders want to see directors in companies hold shares in that company.
However he has been following reports as events unfold at Opes. Will he take action against Opes? “I will keep my options open.”
So how does he feel to own less than 1% of the company he founded 14 years ago? He says it has had a big personal impact but it is business as usual for Destra. He says he is maintaining a positive outlook before adding: “It has been a lot of hard work over 14 years.”
Indeed it has. In the early days of Destra, Carosa used to sleep on a shelf after his bedroom was converted into a warehouse. He was also forced to rapidly change Destra’s direction after listing in 2000 and the company’s focus on digital media failed to attract revenue. After changing the business model to refocus on hosting, the company became the second largest hosting company in Australia before the market caught up and he turned Destra into a content company based on digital media.
Destra too has been affected by the Opes crisis. It was in the middle of an acquisition to buy movie production and distribution company Beyond International which is involved in MythBusters and What’s Good for you.
But the stake was to be financed by a margin loan from Opes Prime with the Beyond shares used as security. Destra’s six million Beyond shares are now owned by ANZ and Destra will book a loss of $900,000 in its investment. “We are now discharged from that outstanding debt.”
He says Destra’s $15 million rights issue had nothing to do with current events. “The capital raising was under way two and a half weeks ago,” he says. Information was sent to shareholders yesterday and it is being underwritten by Prime Media, which owns 19.6% of Destra. Other Destra shareholders include Lachlan Murdoch.
He says Destra is also changing direction. The last few years the company has focused on growing through mergers and acquisitions. “We have done 14 acquisitions in a 24 month period. Our focus is now consolidation, integration and organic growth. I love the company and what we are trying to achieve,” he says. “I am very much focused on Destra and growing it in the future.”