Deal that would have ploughed millions of pounds into GKN’s pension scheme put on hold by asset-stripping owner Melrose
A deal that would have ploughed millions of pounds into GKN’s pension scheme has been put on hold by its asset-stripping owner Melrose.
The vulture investor has called off efforts to sell one of its other operations, office furniture maker Ergotron, due to a management reshuffle.
Delay: Melrose promised to plug a £1 billion black hole in the engineering firm’s pension when it seized control this year
Ergotron is valued at around £620m, with 5 per cent of this (£31m) pledged by Melrose to the GKN pension scheme. Melrose promised to plug a £1 billion black hole in the engineering firm’s pension when it seized control this year. The delay will spark fears it is neglecting its responsibilities as directors instead focus on maximising profits by carving the firm up.
Ergotron is looking for a new chief executive after its previous boss stood down due to ill health.
A Melrose spokesman said it was waiting for a new chief to be appointed before selling Ergotron, adding: ‘Melrose reached an agreement with the pension trustees to invest up to £1bn into the pension funds of GKN. That pledge stands.’
Melrose is expected to auction off GKN’s powder metallurgy arm for up to £1.8 billion.