The activist hedge fund Fursa Funds is trying to oust thefounders of the troubled property services group Erinaceous and establish a new management team.
Fursa, which has built upa 19 per cent stake in the surveyors-to-buildings management group, is calling for an extraordinary general meeting to win the support of other shareholders.
The fund wants the founders – the deputy chairman, Neil Bellis, and chief operating officer, Lucy Cummings – who is his sister-in-law – to be removed from the board. In return, it has promised to consider supporting any fundraising needed to keep the business afloat.
A month ago, Erinaceous breached its borrowing covenants and had to renegotiate lending terms on its £168m of net debt at a rate of almost 10 per cent.
After a warning that the company would not meet full-year expectations last month, Mr Bellis relinquished his role as chief executive to the chairman, Nigel Turnbill. Michael Pearson resigned as finance director and was replaced last week by Dominic Lavelle, former finance director of Alfred McAlpine.
Among other changes, Nigel Davis, commercial director, was assigned the role of company secretary, taking over from Juliet Bellis, the wife of Mr Bellis.
However, the changes have not gone far enough for Fursa, which is headed by William Harley and based in New York. In an open letter to shareholders, Fursa said yesterday: "We are proposing to requisition a general meeting of the company at which we would propose resolutions to remove each of Neil Bellis and Lucy Cummings from the board.
"We look forward to engaging with the remaining directors of the company in helping to reconstitute the board and establish a new management team with the ultimate aim of improving the company's current financial position and increasing shareholder value."Reuse content