At an Extraordinary General Meeting and at separate Class Meetings of the ordinary and preference shareholders held on May 12, shareholders of UK-based leather producer Pittards approved all of the resolutions required to implement the company’s share capital reorganisation and to enable the arrangements for the transfer of the Pension Schemes to the Pension Protection Fund (PPF). Completion of the arrangements with the PPF remains conditional on a number of legal formalities which are expected to be fulfilled this week.

The decision came much to the relief of employees and many anxious customers following a dramatic last minute reversal by former managing director John Pittard and members of his family.

With a deficit of some £34 million and a significant overdraft, Pittards, which has been losing money and whose finances have been deteriorating steadily for some years, could not continue trading and full liquidation loomed as the most likely outcome. Instead the company has now negotiated a Company Voluntary Arrangement (CVA) which protects employees and creditors and allows the business to continue trading, yet hands the pension liability to the government on slightly better terms than if the company had fully liquidated.

The key votes were passed by 12.1 million to 1.2 million and a relieved company will now complete its reorganisation with its shares returning to the AIM stock market on May 22. Although the original shareholders have seen their shares diluted hugely they are still likely to be a vociferous pressure group.