APN executives resign after INM blocks plans to raise capital
Vincent Crowley: one of INM's representatives on the APN board
Shares in APN News Media began trading again overnight in Australia following a boardroom cull over the weekend that resulted in the chairman, chief executive and three independent non-executive directors resigning their positions.
The boardroom split resulted from APN’s two biggest shareholders – Dublin-based Independent News Media (INM) and fund manager Allan Gray – blocking plans by the company to raise capital from shareholders in a bid to address its debt levels.
INM and Allan Gray own 51 per cent of APN’s shares between them.
APN chairman Peter Hunt, chief executive Brett Chenoweth and directors Melinda Conrad, John Harvey and John Maasland resigned following a board meeting on Saturday. Their resignations took effect last night. It was also announced that independent director Kevin Luscombe would retire in April as planned.
This leaves just four members on the board of the Sydney-based media group – INM’s representatives Vincent Crowley and Paul Connolly, former INM director Peter Cosgrove and deputy chairman Ted Harris.
Plans had been advanced by APN’s executives for a rights issue to raise more than 100 million Australian dollars (€77 million), with some reports suggesting it was as high as A$150 million. This would have required INM to come up with A$28.95 million (€22.3 million) or more to retain its shareholding or face being diluted back to 15 per cent.
Participating in a capital raising by APN was never going to be a runner for INM given that it is currently engaged with its lenders to restructure the group’s €423 million net debt.
In a statement issued yesterday, APN said discussions on a capital raising had been under way for “several months”, with Macquarie Capital lined up as the sole underwriter.
‘Unable to agree’
This was due to be launched in conjunction with the release of full-year results on Thursday.
“While the board agreed the company needed to reduce its debt, it was unable to agree on the methodology,” APN said.
“The departing directors have a different view on gearing levels to the major shareholders and in light of their opposing position it is not tenable for them to continue.”
“Other directors believe that consideration of an equity raising should be undertaken in a time frame that allowed other options to be pursued.” APN has also been considering asset sales in New Zealand to raise cash. The firm is involved in print, broadcast and outdoor activities in Australia and New Zealand.
Late last week, in a bid to block the capital-raising plan, INM requisitioned an extraordinary general meeting to remove the six directors who have now stepped down.