Some pounds 1.5m in fees will be paid annually to three members of the incoming management team and Novel. The team includes Silas Chou, who became chairman of Pepe in March; Lawrence Stroll, who will become chief executive, and Maurice Marciano, who will become vice-chairman and chief executive officer for the Americas.
There are two boardroom departures. Joe Sinyor is leaving as chief executive with an pounds 85,000 pay-off, and Milan Shah, part of Pepe's founding family, is standing down. Arun and Nitin Shah will remain.
The financial aspects of the rescue revolve around an open offer of shares that will raise pounds 9.1m. Without this, Pepe said it was likely it would have to cease trading. Results for the year to end-March, also released yesterday, showed a slump from pre-tax profits of pounds 2.7m to losses of pounds 10.3m.
Heavy write-offs have been made. The pre-tax result was struck after pounds 8.2m of exceptional items, and below the line there was a pounds 2.6m extraordinary debit. The retained loss was pounds 16.2m.
Pepe is nearly 100 per cent geared, with pounds 30m of debts owed to a dozen banks. Even though debts have been cut, Pepe paid pounds 4m in interest charges. Fresh, but uncommitted, banking facilities have been conditionally drawn up on the open offer.
Pepe shares, which started the year at 106p, have slumped to 9p. Holders are now being offered the chance to buy 726 shares for every 100 they own at 5p each. The offer is being largely underwritten by the management team and Novel, which will lead to both them and SML, a new company, owning at least 56.4 per cent. The USM quote will be cancelled.Reuse content