British Coal tightened its grip yesterday on its pensions fund arm, which it is struggling to sell, with the appointment of Philip Hutchinson, its secretary and director of legal affairs, as chairman of CIN Management. He moves in as Barry Southcott, the chief executive, was pushed out by British Coal bosses, anxious to push ahead with the sale and complete the privatisation.
But yesterday's management shake-up threatened to deepen the split between British Coal and the trustees of the pounds 16bn in pension funds, which has already reduced the sale to chaos. Trustees threatened to use their authority to block any attempted sale that did not meet their conditions. "Those assets are not British Coal's, they are the trustees's, and we will only permit a sale to a bidder with which we are happy," said a source.
The sale of CINMan, which manages the pension funds on behalf of 500,000 mineworkers, was thrown into confusion last month when the trustees scuppered a proposed purchase for pounds 70m by Friends Provident. The trustees are insisting that any purchaser retain the bulk of CINMan's management and continue its investment style. These conditions make a bid difficult for any group that has an existing fund management business in the UK.
Mr Southcott's position became increasingly vulnerable after the collapse of the Friends Provident deal, as British Coal and the Department of Trade and Industry vented increasing frustration.
Mr Southcott had been in the chief executives post for less than 30 months, and is believed to be leaving with a six-figure payoff.
The management shake-up at CINMan will put day-to-day responsibility in the hands of Mr Southcott's two deputies, Rick di Mascio and Ivan Yeatman.
The Government and its advisers, Samuel Montagu, are now concentrating on negotiations with the only remaining interested party from the previous round, Robeco, the Dutch bank. Since the collapse of the Friends Provident talks a number of other parties have expressed interest, including Hambros, Framlington and Societe Generale, the French bank. But before being able to begin talks with any of these, the trustees would have to re-open the sales process with the DTI, British Coal and the management team, which would inevitably be a lengthy process.
Robeco is interested in acquiring CINMan as a base for building up fund management in the UK, but the price tag has now slipped even further.Reuse content