Business plan by
thwarted directors still to be adopted, reports Fred
Crawley.
Go deeper with GlobalData
Plans to raise a fresh motor
finance operation from the run-off of asset finance lender Davenham
Group plc have been obstructed by the decision of its shareholders
not to support a replacement of the company’s board.
David Anthony, the former CEO
of Hitachi Capital in the UK, had enlisted ex-Moneyway chief Gary
Jennison to help him take control of the struggling lender, with an
eye to reigniting lending with Jennison at the helm as
CEO.
However, at an extraordinary
general meeting (EGM) held on 10 January, shareholders of the group
(in which Anthony has held a 14.9% stake since last September)
voted by a ratio of more than two to one against removing current
directors Paul Burke and James Kerr-Muir.
Under Anthony’s plan,
Davenham’s general asset finance and trade finance lending would
have resumed, while Jennison’s experience would have been used to
open up a new used car finance operation.
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By GlobalDataProperty lending, the cause
of many of Davenham’s woes over the past three years, would have
been left behind.
Davenham ceased writing new
business halfway through 2010, after taking heavy recessionary
losses in its property arm.
Focus on
collecting
On the advice of corporate
finance advisory firm Hawkpoint Partners, Davenham said in July
that it would focus on collecting in its asset and property loans
“in a prudent and orderly manner”.
Following the failure of the
takeover, the group will continue this plan of action. But Anthony
and Jennison have not abandoned their hopes of taking
control.
Speaking exclusively to
Motor Finance in the wake of the EGM, Jennison said: “The
voting down of the resolutions was very strange.
“Only 14.4m shares out of 26m
were voted.
“You would expect a very
active shareholder register, and yet many of the blogs were full of
shareholders saying they did not even know about the
EGM.
“It is a missed opportunity
for a business which could have been saved.
“However, we are not giving
up and may well call another EGM where we would insist on better
communications to shareholders by the chairman – the non-voters are
likely to back our resolution.”
Since the meeting in which
Anthony’s resolutions were defeated, Davenham has issued a
statement saying that its board “remains of the view that it is
likely there will be no value for shareholders”.
Yet despite the assertion
that the group could offer no more value to shareholders through
continued trading, Anthony and Jennison continue to hold the belief
that there is still potential in the business.
Jennison said: “There is a
real opportunity to get it going again but current management are
just focused on collecting in the old book.
“David and I believe it would
be a real waste for Davenham to shut down.
“It has some good people and systems, and had a good
proposition before it made some bad lending decisions.”
