C&W pension fund could need 100m

CABLE &amp; Wireless may be forced to agree an additional &pound;100m payment into its pension fund before it can go ahead with the planned de-merger of its business units.<br /><br />The firm said on Tuesday it had revived plans to split its Worldwide unit, which supplies companies in Europe, Asia and the US, from its international division, which provides fixed-line, mobile and broadband services in the Caribbean, Macau, Panama and Monaco.<br /><br />The demerger is scheduled to complete by March 2010, but this is dependent on the outcome of talks with the trustees about splitting the pension fund&rsquo;s assets and liabilities down the middle, with half going to each of the new businesses.<br /><br />With it&rsquo;s IAS 19 pension deficit standing at &pound;305m at the end of September, some analysts were concerned that a failure to satisfy the trustees could lead to the demerger hitting the rocks. <br /><br />Earlier this month, C&amp;W said it had agreed to make a top-up payment of &pound;75m over a period of three years, which started with a &pound;10m payment in October 2009.<br /><br />But C&amp;W finance director Tim Pennington said this week: &ldquo;I suspect we may have to put in a little bit more&rdquo;. Analysts did not seem concerned that the trustees could force C&amp;W to pay a large lump to cover the &pound;305m deficit, but speculated about how much they would insist on.<br /><br />&ldquo;Far more likely is an agreement for C&amp;W to top up the scheme over a five to ten year period, suggesting it will need to make additional contributions in the &pound;50m to &pound;100m range,&rdquo; said Execution analyst Will Draper. <br /><br />Charles Stanley analyst Tom Gidley-Kitchin was also upbeat, noting that C&amp;W emphasised that the trustees were &ldquo;quite relaxed&rdquo; about the position of the fund.