Guinness Peat's plans to hand back cash face a final hurdle

Guinness Peat must mount one last corporate battle as the Pensions Regulator threw a potential spanner in the works of plans to shrink the one-time activist investor and return cash to backers.

Famous for the break-up of conglomerates such as Staveley and Inchcape, GPG has been selling assets, and plans to rebrand as Coats, the threads business that has become its focus.

But the regulator is reviewing whether the £124m set aside from its estimated £390m cash pile to fund several pension schemes is enough, given a £281m reported shortfall. It could force GPG, whose combative Kiwi chairman Sir Ron Brierley retired three years ago, to pour in more cash by issuing little-used financial support directions (FSDs).

To do this, the regulator must show it is "reasonable to exercise its moral hazard powers," GPG chairman Rob Campbell told investors at the company's AGM in Auckland. Mr Campbell conceded any additional cost could be "substantial" but believes the likelihood of FSDs is "remote". Coats' threads are found in clothing, car airbags and teabags.