IWP to pay its chairman's firm €240,000 to end lease

A company controlled by IWP founder and non-executive chairman Joe Moran will receive €240,000 from the heavily indebted cosmetics and toiletries group when it vacates the head office it occupies on Fitzwilliam Square, Dublin.

It also emerged that the group's restructuring adviser Kroll Talbot Hughes - whose partner Alexander Sorokin is interim chief executive of IWP - is receiving a retainer fee of £75,000 (€108,738) per month in respect of its work.

IWP shareholders were told in the notice of the extraordinary general meeting called to sanction the group's delisting from the Irish Stock Exchange that Drumcove Property Company will receive a dilapidations settlement of €240,000 in return for the termination of a 35-year lease signed in 1991, under which annual rents of €132,053 were agreed.

Mr Moran said in the delisting document that he was "associated" with Drumcove. Records in the Companies Office show that he holds 52.5 per cent of the company, while the remaining shares are held by William Colm Moran, Father Thomas Noel Moran, Rose Moran and Ann Moran.

The latest abridged accounts for Drumcove show that it paid out dividends of €67,000 in 2004 and €76,000 in 2003.

Under the terms of recommended proposal for the debt for equity restructuring of IWP in light of its €120 million indebtedness, existing ordinary shareholders in the group are being offered 3.5 cent per ordinary share in the group. IWP shares closed yesterday at 3.7 cent, down from four cent.

The offer of 3.5 cent per ordinary share is an alternative to a 90 per cent dilution of shareholders' stake in the group, which will leave them with 10 per cent of the IWP's enlarged ordinary share capital after it is delisted.

As part of this recommended arrangement, IWP's secured creditors are converting some €55 million of their debt to equity in exchange for 90 per cent of the group's enlarged share capital.

The delisting document said IWP has not yet finalised the fee for Kroll Talbot Hughes in respect of the restructuring. The amount will be based on realisations from certain disposals "as measured against benchmarks that are yet to be agreed".

The document said IWP finance director Paul O'Brien, who will remain with the group, has an annual salary of €250,000, with the possibility of a discretionary 40 per cent bonus of €50,000, based on the successful implementation of the restructuring.