The New Zealand assets of APN News & Media, including the New Zealand Herald, are more likely than ever to be divided up and sold after its Australia-based chief executive, chairman and independent directors resigned.
The boardroom stoush leading to the resignations exposes the difficulties the media company's board, management and shareholders are grappling.
The dispute stemmed from chief executive Brett Chenoweth's suggestion of a capital raising to reduce APN's debt by an estimated A$300m (NZ$367m).
This was supported by chairman Peter Hunt and four directors - Melinda Conrad, John Harvey, John Maasland and Kevin Luscombe.
However, major shareholders Ireland-based Independent News & Media, INM's part-owner Denis O'Brien, and fund manager Allan Gray, who together own 51 per cent of APN, blocked the move.
Chenoweth and the board members said their position was "untenable" and stepped down yesterday, with only Luscombe remaining on the board until his planned resignation date of April.
APN is now without a chief executive or a strategy to reduce debt, both issues likely to be raised when the company reports its annual results tomorrow.
Speculation has grown that APN director Vincent Crowley - currently chief executive of INM - will return to APN as CEO after more than a decade's absence.
Other names in the mix include former Fairfax CEO Brian McCarthy who took an advisory role at APN last year.
The company yesterday appointed long-serving board member Peter Cosgrove as its chairman.
Cosgrove, who has been on the board for more than nine years, has strong ties to APN's largest shareholder INM.
Analysts at Citi said they expect that, in the absence of senior management, ''we expect little affirmative action on business transformation at the group level for at least 12 months.''
Asset disposals, or a miracle recovery for the media sector, are now the only options for APN which has debts estimated at A$470m (NZ$574m) with A$400m of this maturing in the 2015 financial year, according to UBS.
"Outdoor and radio are feasible assets to sell and APN may have to accept a less than desirable multiple for these businesses," Credit Suisse said in a research note.
INM - which is in talks with its banks over mounting debts - announced it has reached a tentative agreement to sell its had reached initial agreement to sell its South African publishing business for €170m (NZ$268m).
INM is not expected to be a in a position to support a capital raising at present, and would face a massive dilution of its 30 per cent stake.