Pressure on F&P to shake up board

Photo / Richard Robinson

Former activist fund manager Simon Botherway is being touted as a possible nominee for the board of Fisher & Paykel Appliances.

The whiteware maker is one month into its director nomination process. That process is standard for a listed company in the run-up to its annual general meeting, but this year Fisher & Paykel is expected to face a longer list of names than usual amid pressure from institutional investors to alter its board in the wake of its debt blow-out this year.

Tyndall Investment Management fund manager Rickey Ward said Fisher & Paykel Appliances was one of a number of boards that should be considering a change in the current environment.

"I would have thought boards would take the opportunity to re-evaluate what skills they have on board, because a number have been found wanting."

Forsyth Barr analyst Guy Hallwright said there was investor belief that the board of Fisher & Paykel should be strengthened.

"I think there is certainly investor disappointment at the big downgrade made earlier this year and feeling that things could have been done better."

Shareholders Association chairman Bruce Sheppard said the board was "desperately in need of some element of rejuvenation".

One name which is being talked about is Botherway.

He left Brook Asset Management at the end of last year after he and co-founder Paul Glass sold the business to Macquarie Investment Bank.

Brook Asset Management had previously said it was in discussions with the board to add another member with financial experience. But yesterday the company said it did not intend to promote anyone in particular.

Botherway did not wish to comment on the possible nomination. "I am aware of some of that discussion in terms of around the fund management industry. I would prefer to say nothing at this stage."

Sources say he has aspirations to become a company director, rather than returning to fund management when his restraint-of-trade agreement expires at the end of this year.

A new director could be added to the board or replace two of the seven directors who are standing for re-election this year as part of their three-year cycle. Former Air New Zealand chief executive Norman Geary and retired finance company chief John Gilks are up for the vote.

One fund manager said he did not believe Geary or Gilks would get the same level of support seen in the past from investors in the wake of this year's problems.

A nominee needs at least 50 per cent of the vote to get on the board. But any nomination would be likely to struggle without support from the board and its chairman, Gary Paykel.

Fisher & Paykel chief executive John Bongard said it was not his position to comment on what the board wanted.

Paykel told the Business Herald in March the board had got the message from institutional investors but it already had a high level of experience.

"If you want experience and intellectual rigour and the ability to speak their minds with a broad knowledge of what's happening offshore, then I'm very lucky to have it," he said at the time.

Fisher & Paykel Appliances shocked the market in February with a trading update that revealed plunging sales figures and a big rise in its overseas debt levels because of a drop in the New Zealand dollar.

It talked of plans to bring in a cornerstone investor and undertake a capital raising but neither has happened, as yet.

An $80 million funding loan facility has been extended until May 29.

Director nominations close on June 17 and the annual general meeting will be held on August 17. Fisher & Paykel shares closed up 1c at 62c yesterday, down from a year high of $2.33.

PUSH FOR CHANGE
* Institutional investors want the Fisher & Paykel Appliances board to add financial experience.
* Nominations for new directors are being put forward.
* Two directors are up for re-election.