Option bonus for Hartstone bosses

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The Independent Online
THE three executive directors of Hartstone, the troubled leather goods company, are planning to grant themselves substantial new share options, writes Neil Thapar.

On Friday, Hartstone launched a pounds 30m deeply discounted rights issue as part of a recovery plan devised by Shaun Dowling, who becamechairman last year.

The new options will replace an existing scheme that became worthless for the foreseeable future, after Hartstone ran into financial problems because of overexpansion in continental Europe.

The cash call, at 15p a share, was accompanied by a pounds 71.5m taxable loss for the year to 31 March, partly arising from a pounds 51m goodwill write-off against disposals.

Formal proposals for the new terms are being negotiated by the directors with the Inland Revenue and are likely to be put to Hartstone's board for approval in the next few weeks. Their existing options, over 2.2 million shares at 118p and 245p a share, have already been surrendered.

The new options are likely to be granted at a level close to the market price prevailing when they are created. The current price is 22p, down 10p last Friday after the rights issue.

That issue, revealed by the Independent on Sunday two weeks ago, will enable the company to repay a pounds 15m bank loan due in September.