Windfall for Mouchel chairman

 
Kasmira Jefford
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THE CHAIRMAN of struggling infrastructure firm Mouchel stands to pocket £650,000 for his work in a restructuring deal that will see shareholders’ investment virtually wiped out.

Under the debt-for-equity deal announced last week, David Shearer will be paid £150,000 a year for his role as chairman, plus £100,000 to his consultancy firm Buchanan Shearer for “advisory and restructuring services outside his role as chairman”.

An additional £400,000 will be paid “in the event of a capital restructuring” taking place before the end of the year, a circular sent to investors last week said.

Meanwhile shareholders will receive a special dividend of just 1p a share, or £1.14m in total.

Mouchel, which helps build and maintain Britain’s motorways, roads and schools for local authorities, was forced into talks with its banks last year after warning it would default on its loans unless its existing borrowings were restructured.

Under the rescue deal, Royal Bank of Scotland and Lloyds will release £87m of Mouchel’s existing debt for a majority stake in the company. The group will be left with £60m of outstanding debt.

A spokesperson for Mouchel said this weekend the group “has been fully transparent” about the payments to Shearer, who joined as chairman in January.

“David has extensive experience in financial restructuring and has played a crucial role in securing Mouchel’s survival,” the spokesperson said.

Shareholders will be asked to vote on the rescue deal at a meeting scheduled later this month. Without the deal, Mouchel, which employs 8,000 staff, warned it would default on its loans on 31 August and would appoint an insolvency firm.