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APN News & Media chairman Peter Hunt has this evening formally announced his resignation and that of CEO and Managing Director Brett Chenoweth and three other directors – John Maasland, Melinda Conrad and John Harvey – to the ASX.
The five resignations take effect from 9am tomorrow morning (Australian Eastern Seaboard time). A further director, Kevin Luscombe, will retire in April 2013 as previously planned.
APN is already in the process of appointing a search firm to assist in the selection of a new CEO and additional board members.
APN’s statement says the board met yesterday to determine whether the company would undertake the renounceable pro-rata capital rasising which was disclosed last Friday. The capital raising would have been launched at the same time as the full year results were unveiled on Thursday, February 21, with Macquaire Capital the sole underwriter.
The statement also notes the preparation for the capital raising had been supported by all director and had been under discussion for several months although the timing and final decision to proceed had not been agreed.
“While the board agreed the company need to reduce its debt it was unable to agree on the methodology. The departing directors believed a capital raising should be undertake 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 believe that consideration of an equity raising should be undertaken in a time frame that allowed other options to be pursued.”
The APN statement goes onto note that major shareholders INM and Allan Gray were opposed to a capital raising at the present time. It noted INM’s requisition for a general meeting to remove the six directors and establish a new board.
The departing directors had a different view on the gearing levels to the major shareholders and “in light of their opposing position it is not tenable for them to continue.”
Earlier this evening, The Sydney Morning Herald reported that APN News & Media has been left rudderless by the resignation of chairman Peter Hunt, managing director Brett Chenoweth and four other directors this afternoon, after a clash with major shareholders Independent News & Media (INM) and Allan Gray.
The board and management had proposed a capital raising, which UBS analysts flagged to the SMH could be $A300 million at 20 cents a share, to reduce APN’s debts. But the plan was resolutely opposed by INM, which owns 29 per cent of the company, and fund manager Allan Gray, whose Orbis arm owns another 20 per cent.
INM sought to requisition a general meeting to remove Hunt and Chenoweth, as well as independent directors Melinda Conrad, John Harvey, Kevin Luscombe and John Maasland. If successful, this would have left only deputy chairman Ted Harris, independent director Paul Connolly and INM’s Vincent Crowley on the board.
INM said it had lost confidence in Chenoweth’s ability to implement the strategic initiatives necessary to reposition APN for the more challenged media landscape that has emerged in Australasia
APN, which has a market capitalisation of $A199 million, has net debts of $A477 million, of which about $A400 million matures in 2014-15.
