Red Sea proposes removal of four Gresham directors

MEETING: The Red Sea Hotel Group has demanded that the Gresham Hotel group hold an extraordinary general meeting, at which it proposes to remove four of the directors.

However, Mr Amos Pickel, chief executive of Red Sea, a 28-per cent shareholder in Gresham, denied the company would use the e.g.m. to take control of the company. "Trying to win by overthrowing the board is not the target," said Mr Pickel.

"The target is to make this company earn money and develop. It could first of all implement its own strategy which has to do with properly managing the existing hotels and developing and growing the company."

In a letter to Gresham requesting the e.g.m., Red Sea said it was seeking the removal of Mr Sean Henneberry as chairman and director, and Mr Patrick Bourke and Ms Laura Magahy as non-executive directors of the company. It is also seeking the removal of Mr David Bunworth as business development director.

It has also nominated three new directors for appointment to the board. These are Mr Pickel, Mr Harvey Soning, a UK property expert, and Mr Tom Byrne, a specialist in property finance and former head of Davy Stockbrokers.

As Red Sea has more than 10 per cent of the company, Gresham must agree to hold the e.g.m. within the next 60 days under stock exchange rules.

Mr Pickel said Red Sea wanted to retain current chief executive Mr Patrick Coyle, finance director Mr Robert Bastow and non-executive director Mr Donal Chambers on the board.

Gresham's board yesterday said it welcomed the fact that Red Sea had finally made its intentions clear. But it said that, based on Red Sea's e.g.m. resolutions, it felt it was trying to control without making an offer. Mr Pickel denied this, adding that it would not bid for the remaining shares and take the firm private.

"If we were trying to do that, maybe we should have convened the e.g.m. and said let's change the whole board and let's have four or five or six Red Sea-nominated directors and this is clearly not what we are going to do," he said.

"This company is not our toy and it is not the current board's toy. It is the property of the shareholders and the board has the duty to direct this company to make profit for the shareholders."

Mr Pickel has criticised the current board's decision to rebrand under the Gresham name, describing it as a mistake. He said there were many hotels in the UK alone which used the name Gresham, causing confusion. "The name is only one part of the concept of branding. The other is the marketing and reservation system."

A new board would examine this and other issues. Mr Pickel said the current board's decision to publicise Red Sea's initial request to nominate board members and to refer Red Sea to the Takeover Panel damaged the company. "This is not something that should be a public fight. It's about running a company properly," he said.

However, if the e.g.m. pases its resolutions, Mr Pickel said he thought the Red Sea-nominated directors and the remaining Gresham directors could work together: "We certainly would have no grudges and we believe we would be able to co-operate and co-direct the company."