THE CHIEF executive of troubled fire engine provider AssetCo resigned with immediate effect yesterday at the request of the board
John Shannon’s ousting is the latest twist in a rescue saga that saw AssetCo’s investors force through a £16m emergency share placement on Wednesday.
Shannon, AssetCo’s largest shareholder after leading a management buyout in 2005, had clashed with investors after blocking the fundraising on Monday, plunging the company’s future into doubt and causing its shares to be suspended.
In a hastily-arranged court hearing the evening after the company’s general meeting, shareholders were granted an injunction to force Shannon to comply with the rescue plan’s terms. It included a pledge from three key investors to supply £10m if they could appoint a new executive chairman.
“Following the request of the board John Shannon has today resigned with immediate effect,” AssetCo said in a statement.
Tudor Davies is now leading the company as executive chairman. Tim Wightman has stepped down as chairman and Christopher Mills has joined the board as a non-executive director.
Shareholders were said to have grown frustrated with Shannon since AssetCo admitted in February it was struggling to raise £4m in short-term debt while it refinanced a £50m long-term loan facility. The problems quickly grew, leading to a proposed £8m and then £16m share placement. AssetCo now believes it requires an extra £3-4m of working capital in addition to the £16m just raised.
AssetCo’s shares closed 3.6 per cent down at 13.5p on the news.