Arjo Wiggins chief executive quits

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The Independent Online
Arjo Wiggins Appleton, the troubled Anglo-French paper- making and merchanting group, yesterday announced the sudden departure of its chief executive, Alain Soulas. He has been replaced by Philippe Beylier, who has been in charge of the group's successful merchanting division and will now be based in the UK.

The move was welcomed by the City, which saw it as potentially heralding the sale of the group's struggling European manufacturing operations. The shares added 6p to 204p.

Arjo said Mr Soulas was leaving by mutual agreement, but added that he was expected to pick up around pounds 740,000 compensation for loss of office. One source close to the company said the parting involved "a degree of French pragmatism".

The departure of Mr Soulas is thought to be linked to the widespread review being conducted by new deputy chairman Daniel Melin, also chairman of Arjo's 40 per cent shareholder Saint-Louis, the big French food and sugar group, who arrived in December.

The results of the review, which is thought to involve the management consultants McKinsey, are expected in the summer. Analysts expect it to recommend radical action to deal with the group's problems. Mike Murphy of brokers SBC Warburg said there was a question mark over the sustainability of the European paper-making business - parts of which were loss-making last year. "The removal of Soulas, who is a manufacturing guy and has run mills in the past, could remove an obstacle to the sale of that business," he said.

He estimated Arjo's break-up value at only between 155p and 160p a share, valuing the whole group of around pounds 1.27bn.

The shares have slumped from 288p last July after the company was forced to issue a series of trading warnings as destocking in the European paper industry hit its business.

As it turned out, pre-tax profits slumped from pounds 217m to pounds 72m last year, depressed by a pounds 121m exceptional restructuring charge.

The company announced 690 job cuts - over half of which related to the carbonless and thermal papers operations in Europe.