AssetCo chief ousted after court defeat

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.