Shares in Australasian publisher and broadcaster APN News and Media went into a trading halt today after a news report called into question the leadership of chief executive Brett Chenoweth while the company considered a capital raising.
Independent News and Media (INM) - which owns 28.95 per cent of APN News and Media - has called for Chenoweth's resignation, saying that it had "lost confidence" in him.
In a statement released to INM's Irish Independent, INM announced it was seeking the removal of Chenoweth as director and chief executive of APN News and Media, which owns a host of radio stations and newspapers across Australia and New Zealand, including the New Zealand Herald.
INM said it had "lost confidence in Mr Chenoweth's ability to implement the strategic initiatives necessary to reposition APN for the more challenged media landscape that has emerged in Australasia".
"Notwithstanding its market leading positions APN has underperformed as evidenced by a near halving of APN's interim profits in the period from the first half of 2010 to the first half of 2012," INM added.
INM has formally advised APN of its views and it is now seeking an extraordinary general meeting to allow all APN shareholders to express their views.
In a short statement to the Australian Stock Exchange, APN News and Media said: "APN is investigating these comments, but believes these comments arise from the fact that APN is considering a pro rata capital raising, in respect of which it is being advised by Macquarie Capital (Australia)."
APN News said the non-INM representative directors of APN unanimously supported Chenoweth and the strategy being implemented under his leadership.
The company said the reason for the trading halt is to prevent trading taking place in a speculative or uninformed market while APN investigates INM's comments and completes its deliberations about a potential capital raising.
It said the trading halt will remain in place until February 19.
Allan Gray Australia has 19.8 per cent of APN News.
APN's shares last traded at A30c, having traded in a wide A24.5c to A96c range over the last 52 weeks.
In an earnings update released last December, APN News said its second half net profit would be affected by the deterioration of publishing revenue in Australia.
"Publishing in both Australia and New Zealand has seen weaker market conditions than in H1, with APN's publishing revenue in H2 down by 10 per cent," it said then.