PNC Telecom

A compromise was reached at strife- mobile phone retailer PNC just hours before a special shareholders' meeting called by founder Geremy Thomas to oust the whole board (except the finance director). The deal came after a dramatic revelation that one of its major suppliers had threatened to withdraw its credit line if the management changed again, an eventuality that would have plunged the company into financial crisis. Under the deal, Thomas (who had been looking replace the whole board except the finance director) agreed to take the role of deputy chairman, with non-executive John Peett taking the chairman's seat from tycoon Lord Stevens (who has resigned), and chief executive Ian Gray keeping his place. Gray was appointed in June, and has been given early credit for turning the group's fortunes. He replaced Darren Ridge, whom the company has taken to court amid questions about the removal of assets. Of the recent 'resolution' Jonathan Wright of PNC's adviser Seymour Pierce admits 'it is better than the alternative', but adds that 'I think the boird has got to work out who does what, operationally and strategically.' He also confirms that PNC is still up for sale, but gives no indication that a deal is even on the horizon. Analyst Anne MacMahon expects a loss of £1.6m this year, after £2.7m of restructuring charges. Avoid.

Sector: Fixed Line Telecommunications

Companies: PNC Telecom

Market cap: £9.4m

PE Forecast: n/a

Share price: 19.5p

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