APN directors resign as shareholders reject fundraising
Published 19/02/2013 | 04:00
THE chief executive of Australasian media group APN has resigned as part of a re-organisation of the company.
Brett Chenoweth will step down as CEO along with his chairman and three independent directors.
The moves came after shareholders rejected plans for APN to launch a share offering as part of restructuring its business.
Last week, Independent News & Media (INM), which has a 28.95pc stake in APN, called for the resignations, saying it had "lost confidence" in certain directors' ability to reposition the business.
In a statement from APN yesterday, the company said chairman Peter Hunt, Mr Chenoweth, and the directors Melinda Conrad, John Harvey and John Maasland had resigned effective today. Another director, Kevin Luscombe, has already said he will retire in April.
APN had been looking at a capital raising that would have been launched on Thursday when the company reports its annual results.
"Preparation for the capital raising had been supported by all directors and had been under discussion for several months – although the timing and final decision to proceed had not been agreed," the company said.
"While the board agreed the company needed to reduce its debt, it was unable to agree on the methodology.
"The departing directors believed that a capital raising should be undertaken at the time the company announces its full year results.
"This would have been in conjunction with a continued focus on repositioning the publishing businesses and potential asset sales. Other directors believed that consideration of an equity raising should be undertaken in a timeframe that allowed other options to be pursued," APN said.
"INM and its major shareholder, together with Allan Gray, representing approximately 51pc of APN's shares, have unequivocally indicated they are opposed to a capital raising at the present time," the statement added.
Last Friday, INM called for an extraordinary general meeting to remove six directors, including the chairman and CEO, and establish a new board.
"This would consist initially of two INM representatives, Vincent Crowley and Paul Connolly, as well as Peter Cosgrove and deputy chairman Ted Harris," 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," APN added.
At a previous board meeting, the non-INM representative directors all unanimously stated their support for Brett Chenoweth and his strategy.
The day before the mass resignation, the fund manager Allan Gray, which holds about 19pc of APN, backed INM's position and came out in favour of the changes as well.
"It's better that they go because it's (the capital raising) a silly thing to do," Simon Marais, managing director of Allan Gray, told 'The Australian' newspaper.
"The important thing to do is turn the business around and get it fixed,'' he added.
With the chairman and chief executive gone, Peter Cosgrove may be named acting chairman of the company. Mr Cosgrove has been on the board since 2003. APN reports its full year results on Thursday.