Shares in Coats Group, formerly GPG, jumped 13% on the London Stock Exchange after the company said it reached a £255 million ($456 million) settlement with the UK Pensions Regulator.
The industrial thread and zip manufacturer said it has agreed with the trustees of the UK Coats Pensions Plan and Brunel Holdings Pension Scheme to provide financial support for a combined deficit, which stood at £485 million ($867 million) as at April 1, 2015.
The deal will safeguard pension payments for 24,000 scheme members and cease further regulatory action against the company in regard top the two schemes.
Coats said it has agreed to upfront payments totalling £255.5 million paid directly into the schemes, to be followed by annual contributions totalling £14.5 million, to paid until 2028.
"This is a good outcome for all parties involved,” said Mike Clasper, chairman of Coats.
“We have consistently stated that we would do the right thing by our pension scheme members balancing the interests of all our stakeholders. I believe what we are announcing today does just that. The settlement allows us to pay dividends to our shareholders, whilst retaining sufficient cash to continue to invest in growth opportunities. At the same time, we remain committed to fulfilling our continuing obligations to our pension schemes and their members and concluding a settlement for the Staveley Scheme. Coats can now fully focus on growing the business for the benefit of all its stakeholders.”
Coats said that once the settlement is completed and regulatory action has ceased, it will lift its restrictions on distributions to shareholders.
The news sent the company’s shares up 6p, or 13%, to 52p. The shares have doubled in value since July.
Coats is the last remnant of Sir Rob Brierley's second empire, originally known as Guinness Peat Group.
The company delisted from the NZX and ASX on June 24 following a 99% approval from shareholders at its annual meeting.
Some New Zealand shareholders chose by default to have their shares automatically transfered to the UK main register.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Team NZ insider: ‘Why we favour Halsey extension option’
- Chapman Tripp says artificial Intelligence automates tasks, not jobs
- A2 Milk shares surge as sales growth accelerates
- NZ dollar holds above 68 US cents as greenback buoyed on rates, euro woes
- Intuit says it’s rating higher with users but subscriber growth slows
Most listened to
- Mycare's Mark Jeffries and WeVisit's Sam Johnson discuss their merger
- Arvida's Bill McDonald says progress is up, despite profits down
- Argosy chief executive Peter Mence discusses how the company is faring without property revaluations adding to the bottom line
- A2 Milk CEO Geoff Babidge on the outlook for the rest of the year
- Intuit chairman and CEO Brad Smith on QuickBooks online's progress
- Thematic founder Alyona Medelyan on how Y Combinator changed the startup
- NBR Radio: The best interviews, with Grant Walker – updated daily