UK - Beleaguered US car component giant Federal Mogul has made an 11th-hour offer to avert the wind-up of the pension scheme at its UK arm.
Creditors of the US firm have offered the trustees of the £1bn Turner & Newell Pension Scheme £14m a year for the next three years and pledged to fund it fully on a minimum funding requirement basis within the decade. The scheme has a deficit of £662m.
An earlier one-off offer of $130m (£72m) from investor Carl Icahn - who leads the group of Federal Mogul creditors - was rejected by the scheme’s independent trustee, Alexander Forbes, for being too low.
The new offer came only days before Alexander Forbes was due to appear in court proceedings which could have blocked the US creditors’ plan to take control of all of Federal Mogulís assets. The trustee group said it would study the new offer to ensure it was in the best interests of scheme members.
A spokesman said: “We are pleased there is a new offer, but want to make sure it will work in the long-term. We also want to ensure there will be legally binding assurances attached to it.”
T&N administrator Kroll is also reviewing the offer on behalf of claimants.
Officials from Amicus, the Transport & General Workers’ Union and the GMB have met with Kroll to discuss the ‘workable’ offer.
However, Icahn’s offer has forced T&Nís sister fund, the Champion Pension Scheme, into seeking its own guidance hearing at the High Court.
The scheme’s independent trustee - Ann Hearn Associates - had been following events at T&N and now believes it needs High Court guidance on how it should proceed. As with T&N, the scheme’s sponsor - Champion Sparkplugs - is in administration.
The scheme has 296 active, 347 deferred and 514 pensioner members.
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