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GPG gets warning notice over Coats pension scheme
GPG gets warning notice over Coats pension scheme
By Paul McBeth
Dec. 22 (BusinessDesk) - Guinness Peat Group has received a warning notice over its Coats Pension Plan from the UK Pensions Regulator over the level of support for the superannuation scheme, which looks set to further delay its transition to the UK threadmaker.
The company received the notice for the scheme on Dec. 19, having already been going through the same process for its Brunel and Staveley pension schemes. In October, GPG said the UK regulator contended at least one of the sponsoring firms for the plan was insufficiently resources, and the company today said it's reviewing today's notice. If the matter isn't resolved through negotiations, the earliest a formal hearing could take place would be in the first half of 2016.
"We do not believe the Coats Plan requires additional support over that which is already being provided by the Coats business and we do not accept it is reasonable for(the UK Pensions Regulator) to issue a WN (warning notice) in relation to the Coats Plan," chairman Mike Clasper said in a statement. "We will be vigorously defending our position, taking into account the interests of shareholders, pensioners and the overall Coats business."
Settling GPG's pension obligations has been the final task before its rebrands as Coats, its sole remaining business, after liquidating the rest of its portfolio to return cash to shareholders.
As at Sept. 30, the deficit for the pension schemes was 237 million pounds, up from 178 million pounds as at June 30, due to a reduction in the discount rate applied to the valuation.
GPG today said it is still in talks with the UK regulator to try and resolve the Brunel and Staveley pension disputes.
"Once these matters are clarified, the board expects to run an appropriately leveraged balance sheet and pay annual dividends to shareholders from free cash flows generated by the Coats group," it said.
The shares last traded at 42 cents, and have dropped 29 percent this year.
(BusinessDesk)
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