Shares in Dawson International investor Leeds Group plummeted 9.3 per cent to 15.88p yesterday after it admitted the value of its stake in the cashmere business was “uncertain”.
The firm used its update to the London stock exchange to criticise the Pension Regulator and the Pension Protection Fund (PPF) after they rejected a rescue deal with the former Pringle owner last week.
The Hawick-based cashmere business warned it could be forced into administration unless it could agree a payment scheme on its yawning pension deficit with the firm’s 3,200 pensioners, adding that the collapse of negotiations to have its pension fund put into the PPF put the firm’s 200 remaining employees at risk.
Leeds, the vehicle of Swedish investor Peter Gyllenhammar, confirmed that its representative on the board of Dawson, Jan Holmstrom, resigned last week - Dawson said this was in “frustration” after talks with PPF and the regulator collapsed.
The company said it had been working closely with Dawson in its attempt to reach a compromise with the pension authorities and had offered to “guarantee a proposed fundraising amongst existing shareholders”.
It added: “We cannot see the rationale whereby PPF turn down an offer which will clearly give more than insolvency value and in addition will not put a lot of jobs at risk. The board of Leeds Group cannot see the rationale behind the PPF reasoning as it is very likely that UK taxpayers now have to pick up a larger bill.”
Last year Dawson sold its bed linen business for £6 million, its third disposal in two years, in an effort to plug its pension fund deficit. The deal left Dawson with only its Barrie knitwear manufacturing business in the Borders and its US arm, which sources cashmere garments from China..
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Weather for Edinburgh
Saturday 25 May 2013
Temperature: 6 C to 17 C
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Temperature: 9 C to 16 C
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