Waterford investors approve proposals for change

Shareholders in Waterford Wedgwood have approved the company's latest restructuring proposal by a large margin.

At an extraordinary general meeting yesterday, the company secured approval for a €100 million rights issue to fund a redundancy programme that will see the group shed 1,800 staff and close the Dungarvan plant of Waterford Crystal.

The meeting also approved a "whitewash" waiver that allows chairman Sir Anthony O'Reilly and his brother-in-law, Peter Goulandris, who is group deputy chairman, to raise their shareholding above 30 per cent without being forced to bid for the entire company.

The two men, who between them control 24.6 per cent of the company, are underwriting the rights issue - a move that could see their shareholding rise as high as 53.96 per cent.

Waterford Wedgwood chief executive Redmond O'Donoghue told shareholders that the restructuring was "fundamental and necessary for the group".

"We believe it is absolutely essential if the group is to have a financially stable future," he said.

Shareholder Ray Fitzgerald questioned the group's expectation that the restructuring programme could yield savings of €90 million by 2006.

"It sounds far too good to be true," he told the board. "I have never seen such a return on capital investment within a year."

He questioned why, if the savings were to be made in such a short time, the group had not turned to the banks for funds rather than the shareholders.

Mr O'Donoghue said there would be "great difficulty" in getting bank debt to finance the restructuring.

Throughout the meeting, he alluded repeatedly to the "reassuring" fact that Sir Anthony and Mr Goulandris were fully underwriting the issue, noting their business acumen and belief in the business.

Another shareholder questioned the pricing of the rights issue. He said the group's share price had fallen sharply in the wake of previous discounted rights issues. "I am very concerned that if I support a rights issue, I would be throwing good money after bad," he said.

Mr O'Donoghue said that the rights were priced at six cent - despite the fact that it was a premium to the current share price - because that was the nominal value of the shares and it was "fair" to investors who paid that price in a deeply discounted rights issue only last December.

A former company employee said shareholders were being "bamboozled" by the board. "This is not a restructure of the company, it is a destruction," she said to general applause.

Shareholders approved all motions with minimal opposition.

Sir Anthony, his wife, Lady Chryss, and Mr Goulandris, who are all group directors, did not attend the meeting because of the whitewash resolution, which involved them directly.

A planned protest by Waterford Crystal workers was cancelled amid signs of "limited progress" in talks regarding the terms of a redundancy package.