Compromise fends off PNC Telecom collapse
Out on Manoeuvres
PNC Telecom, the owner of the KJC mobile telecom retail chain, staved off collapse today after striking a "compromise" deal with a major shareholder.
Geremy Thomas, former CEO, founder and owner of 17.62 per cent of the company, had called an EGM for today in an attempt to vote out the entire board - with the exception of the finance director.
But PNC had a bombshell of its own: in a regulatory news statement issued to the London Stock Exchange, the mobile firm said a major creditor (said by FT to be Vodafone) had informed it on Christmas Eve that it would withdraw extended facilities and demand immediate payment of monies owed if there was a change of management control.
And if that weren't bad enough: "In addition to repaying the above, this action will require the Company to seek further alternative sources of credit to purchase stock. The Company does not currently have sufficient facilities available to it to meet these obligations. In the event that the Company is unable to fund this outflow, it is the opinion of the directors that PNC will have to cease to trade."
The stark warning was enough to bring the two sides to the negotiating table: the deal sees Thomas return to the company as non-exec deputy chairman, the departure of Lord Stevens as chairman, and the appointment of John Peete, already a director as new chairman.
A run-through of PNC news over the last year on Etrade UK makes for dismal reading: two profit warnings, the dismissal/resignation of CEO Darren Ridge and proceedings launched against him for the return of monies that the company says is due to it. Shares today are 19.5p, against a 12-month high of 33p and the glorious bubble heights of 400p, reached in 2000.
PNC also owns the 07000 personal phone number operation. ®
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