Hibu skips loan payments but hands out bonuses to 2500 staff

Click to follow
The Independent Online

Hibu, the owner of Yellow Pages, has paid bonuses two months early to 2,500 staff even though the debt-laden company missed payments on £2bn-worth of loans in February and March and breached bank covenants.

The bonuses were agreed at the start of this month, almost immediately after Hibu's financial year ended on 31 March. Bonuses were previously paid in June.

The chief executive Mike Pocock is understood to have received a payout. His last declared bonus, covering 2011 but announced a year late in the 2012 annual report, was worth £937,000.

A spokesman confirmed that bonuses have been paid, but offered no comment. A source claimed that it made sense to pay bonuses early as it would help with staff retention.

Shareholders have seen the value of Hibu crash from £1bn to £9m as sales slumped because of the rise of the internet.

The ailing company warned earlier this year that it would not make an interest payment of £49m, due in February, and a £25m payment due, last month.

Its lenders, which include Royal Bank of Scotland and Barclays, are set to take control in a debt-for-equity swap but a deal has taken months, and is not expected now until the summer.

Last month, Mr Pocock fired two senior executive based in the United States amid speculation that they were plotting a buyout.

Hibu, which rebranded itself from Yell last year, has been struggling for years with its debt burden – a legacy of an acquisition craze before 2007. Group revenue slumped 14 per cent in the last quarter, with even digital directories falling 7 per cent as its website, the online version of Yellow Pages, failed to keep up with the likes of Google.

At the time of the last trading update, Mr Pocock said he continued to have "constructive discussions with lenders and hope to reach agreement on a new capital structure in the near future".