Melrose Industries has postponed the sale of one of its American subsidiaries from which some proceeds were earmarked for the GKN pension schemes.
The $800m (£620m) sale of Ergotron has been delayed as the international conglomerate seeks a new chief executive for the Minnesota-based subsidiary after its current chief executive stepped down from the role due to illness, according to The Times.
Melrose had promised £1bn to the GKN schemes following an £8.4bn hostile takeover of aerospace and automotive giant GKN in March, some of which was due to be paid from around 5% of the proceeds of the sale of Ergotron.
Alongside a package of mitigation measures, the takeover specialist had agreed a £150m upfront contribution and £300m in annual contributions over a five-year period.
Ergotron's sale had been announced to the market in March, but the chief executive's resignation left a "leadership vacuum" which needs to be filled to facilitate the value, a source told The Times.
While the sale's postponement will delay payment to the schemes, a spokesperson reaffirmed Melrose's commitment to the 32,000-member GKN schemes.
"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," they said. "A total of £1bn was pledged and that pledge stands."
Melrose's hostile takeover of GKN came after a bitter war of words between Melrose, GKN's then board, and the schemes' trustees, during which The Pensions Regulator also warned there could be a "detrimental impact" on the schemes, while Melrose was forced to defend its track record on pension obligations at previously acquired businesses.
However, when GKN shareholders were asked to vote in March, the majority approved the bid.
The GKN schemes had a £1.1bn deficit on a gilts-flat basis in March, while their combined buyout figure was around £1.9bn.
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