Melrose plans to fund GKN pension scheme in jeopardy

Melrose has put on hold plans to sell one of its American subsidiaries for $800m from which funds were marked for the GKN pension scheme.

According to a report in The Times yesterday, 27 August, the aerospace giant has put on hold plans to sell Ergotron, a maker of equipment for schools and hospitals, due to the illness of its chief executive, in a move that jeopardises the future funding of the GKN pension fund.

The firm purchased GKN earlier this year in a fractious takeover, in which the American company agreed to pay a £1bn package for the pension schemes, which has 32,000 members.

A Melrose spokesperson said the initial agreement made with the pension trustees still stands.

“During the GKN bid process Melrose agreed a formula with the pension fund trustees where a portion of proceeds from the sale of any assets would go to the pension fund. A total of £1bn was pledged and that pledge stands,” it said.

As part of the deal, Melrose pledged to sell of its existing businesses in order to plug the £1bn pensions deficit.

The group is expected to publish a trading update in the first week of September.

In March, the £8.1bn takeover was approved in order to “create a UK industrial powerhouse”.

    Share Story:

Recent Stories

New
New
New

The modern age
Deputy editor Natalie Tuck chats to the ABI’s Yvonne Braun about her work at the ABI and her thoughts on key pension topics

Stepping into the spotlight
Laura Blows speaks to Laird R. Landmann, group managing director and co-director of fixed income at US-based TCW, about the opportunities TCW can provide for UK pension funds