APN News & Media's chief executive, chairman and three directors resigned last night in the face of a campaign by the two largest shareholders against a planned capital raising.
Brett Chenoweth (CEO), Peter Hunt (chairman) and directors Melinda Conrad, John Harvey and John Maasland will go today. Harvey and Maasland are New Zealand-based.
Independent director Kevin Luscombe will retire in April, as previously planned, APN said.
The departing directors believed that a capital raising should be undertaken when the Australia-based publisher and broadcaster, which owns the Herald, announced its annual results on Thursday.
"Independent News & Media plc and its major shareholder together with [fund management company] Allan Gray representing approximately 51 per cent of APN's shares have unequivocally indicated they are opposed to a capital raising at the present time," the company said in a statement late last night.
Chenoweth, in an email to staff, said the decision to resign had not been made lightly.
"Following a series of discussions regarding the need to raise capital it has become clear that my views and those of the major shareholders in respect of this matter are irreconcilable. As such, my position and the position of a number of the directors, became untenable," he said.
"So ... I will now not be in a position to finish what I have started. This is the first time in my life that I can say that and I am very disappointed."
Chenoweth joined the board in January 2011. He has more than 18 years of professional experience working exclusively in the areas of media, technology, telecommunications and online businesses, having held senior executive roles at Telecom New Zealand.
Asked to comment, departing director John Harvey said: "It is obviously very disappointing that it has had to come to this but there was not a lot of choice at the end of the day."
APN said: "The departing directors have a different view on gearing levels to the major shareholders and in light of their opposing position it is not tenable for them to continue."
The debt-laden Independent News & Media, which owns 28.95 per cent of APN, is in the throes of selling its South African assets.
APN said the board met on Sunday to determine whether the company would undertake a renounceable pro-rata capital raising.
Preparation for the capital raising had been supported by all directors and had been under discussion for several months, although the timing and final decision to proceed had not been agreed. "While the board agreed the company needed to reduce its debt, it was unable to agree on the methodology," the company said.
APN's market capitalisation, as of last week, was A$198.5 million, compared with the company's debt, which stands at about A$450 million.
In an earnings update released last December, APN News said its second-half net profit would be affected by a decline in publishing revenue in Australia.