Greg Hutchings, who hoped Mosaic would emulate his successful conglomerate Tomkins, is to resign the directorship he has held since 1987. Hugh Sykes, chairman, will leave at the annual meeting in September.
Mosaic was formed in 1987 when Mr Hutchings created an acquisition vehicle for companies too small and entrepreneurial for Tomkins. After a dazzling shopping spree, including a venture into the merchandising of cartoon characters such as Dennis the Menace, the group was brought down by a combination of deferred payments and recession.
Having peaked in 1990 at 368p, Mosaic's shares were suspended at 60p last October after Rodney Day, vendor of a subsidiary acquired in 1988, said he would redeem 2.99 million preference shares issued in payment.
Mosaic's banks, faced with demands for more than pounds 2m of other deferred considerations, refused to provide the pounds 3m needed to repay Mr Day. The final dividend, already announced, was cancelled.
The debt to Mr Day has been restructured so that just over pounds 500,000 of prefs will be repaid immediately, with repayment of most of the remainder spread over 10 years. Almost pounds 1m of his debt is to be converted into ordinary shares at the rate of 20p each. Mr Sykes said the figure was arrived at because it approximated to Mosaic's net asset value.
It is also the price at which all Mosaic's other deferred considerations are to be paid off, leaving the company with no outstanding commitments. Existing shareholders will end up owning just 46 per cent of the enlarged equity. Mosaic's banks have provided pounds 4.75m of new facilities and two small businesses have been sold to reduce borrowings to about pounds 1.5m, gearing of 20 per cent.
When the suspension on Mosaic's shares is lifted on 28 May the shares are expected to trade at about 15p. Last month the company announced interim pre-tax profits of pounds 207,000 for the six months to October 1992 compared with pounds 3.2m in 1991.
Mr Sykes said yesterday that current trading 'continues to be mixed and shows few signs of sustained recovery in demand'. Figures for the full year to April will also carry 'substantial' reorganisation costs.Reuse content