A trading halt on the shares of New Zealand Herald publisher APN News & Media has been lifted but the company sits rudderless after the resignation of its chairman, chief executive and three board members.
APN's NZX-listed shares dropped five cents to a low of 31c today before recovering this afternoon to 34c.
APN's chairman Peter Hunt, CEO Brett Chenoweth and three independent directors Melinda Conrad, John Harvey and John Maasland announced they would step down at 11am after a stoush with the company's largest shareholders.
Another independent director, Kevin Luscombe, will resign as planned in April.
After two years in the job Chenoweth emailed his staff across New Zealand and Australia to say it was the first time in his life he had been left "very disappointed".
Chenoweth and APN's board had proposed a capital-raising, which UBS analysts flagged could be A$300 million ($365 million) at A20cents a share, to reduce APN's debts.
However, the plan was resolutely opposed by Independent News & Media, which is suffering its own financial woes, and fund manager Allan Gray - together representing 51per cent of the APN's shareholdings.
INM, which is 22 per cent owned by Irish billionaire Denis O'Brien, on Friday sought a general meeting to remove the executives and directors concerned. However, it appears they have jumped before being pushed.
APN notified the NZX this morning of the resignations, saying in a statement that INM and Allan Gray had "unequivocally indicated they are opposed to a capital-raising at the present time".
The departing directors believed that a capital-raising should be undertaken when the company announced its full-year results on Thursday, said the statement.
However, the other directors believed that talk of an equity-raising should be undertaken "in a time frame that allowed other options to be pursued".
"While the board agreed the company needed to reduce its debt, it was unable to agree on the methodology," said APN's statement.
"The departing directors have a different view on gearing levels to the major shareholders and in light of their opposing position it is not tenable for them to continue."
In an email to APN staff as reported by the NZ Herald, Chenoweth said: "Following a series of discussions regarding the need to raise capital it has become clear that my views and those of the major shareholders in respect of this matter are irreconcilable.
"As such, my position and the position of a number of the directors, became untenable.
"So ... I will now not be in a position to finish what I have started. This is the first time in my life that I can say that and I am very disappointed."
The company said its new board would consist initially of two INM representatives, Vincent Crowley and Paul Connolly, as well as Peter Cosgrove and deputy chairman Ted Harris.
Allan Gray's Simon Marais told the Australian Financial Review on Monday that he was "dead against" a rights issue and "if the board insists (it is) the only way ... we'd rather be rid of them".
APN said it was in the process of appointing a search firm to assist in the selection of a new CEO and additional board members.
On the ASX, APN shares closed last Thursday at A30c a share, and have fallen steadily since May 2010 when they peaked at A$2.50.
APN, which has a market capitalisation of A$199m, has net debts of A$477m, of which about A$400m matures in 2014-15.
A substantial raising would be impossible without the support of the two largest shareholders.
UBS analyst Richard Eary, who assumed a A$300m raising at A20c a share, noted on Monday any accelerated non-renounceable rights offer above the current market cap would require shareholder approval via an extraordinary general meeting.
- BusinessDay.co.nz and Sydney Morning Herald