Shareholders in Ferranti bridle over 1p GEC offer: Chief executive asks for acceptance of package to save jobs in stricken firm

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The Independent Online
THE GULF between Eugene Anderson, Ferranti's chief executive, and opponents of GEC's rescue package widened yesterday when Mr Anderson appealed to shareholders to accept the deal for the sake of the workforce.

His warning that most of Ferranti's 3,000 British workers will be made redundant if GEC's 1p- a-share bid fails marks the start of what promises to be a lively run-up to next month's vote on the offer.

John Katz, representing shareholders opposed to the offer, called Mr Anderson's appeal frightful, accusing him of using the workforce as a public relations football.

'Neither GEC nor Mr Anderson can tell me how many workers will have jobs if the offer stands or falls,' Mr Katz said. 'Shareholders are not responsible for the company's demise, so it is wrong to say they would be unpatriotic to reject the bid.' Mr Anderson made his plea after revealing an increased pre-tax loss of pounds 19.4m, up from pounds 10.9m, in the six months to 30 September. The defence electronics company is now losing pounds 1.5m a month and Mr Anderson repeated that the only alternative to GEC's offer was receivership.

GEC is adamant that its offer, which values Ferranti at just pounds 10.9m, will lapse unless it receives acceptances from 90 per cent of shareholders. About 48,000 small investors own 51 per cent of Ferranti. There is concern and some irritation at Ferranti that opposition shareholders are being misled over the chances of a better offer emerging. 'There is not,' Mr Anderson said.

Ferranti's problems were made clear yesterday, with turnover cut from pounds 109.4m to pounds 91m and an order book of pounds 164.8m, down from pounds 246.1m. Borrowings of pounds 98.6m, against shareholders' funds of pounds 34.9m, and tight liquidity had reduced its credibility when bidding for contracts, Mr Anderson said.

The company has about 40 vacant properties in Britain and America but raised only pounds 2.4m from sales in the half-year. Interest charges were down to pounds 4.6m, against pounds 6m. Provisions of pounds 6.7m have been made for legal action over the sale of operations in Italy and the placing of a US division into Chapter 11 bankruptcy.

Ferranti made only pounds 600,000 from its associated businesses. GEC had been holding separate discussions with Thomson, of France, about its joint venture with Ferranti. Mr Anderson said he was not party to the talks. Ferranti's net worth continued to drop, down from pounds 62.2m to pounds 34.9m. Net debt was pounds 98.6m, up from pounds 74.1m.

Mr Anderson said: 'Clearly, these are very disappointing results and they confirm the worsening of the company's financial position.' More than 1,000 job have gone in the past 12 months.

Last week Ferranti increased its overdraft by pounds 7m to pounds 17m, additional capital that he said would last until the shareholders' vote on GEC's offer on 8 December. If the offer fails Mr Anderson said he would ask the company's bankers to request appointment of receivers.

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