Metro 2008 annual report – continued

Reading the whole Metro International 2008 annual report shows that without the sale of the Swedish (€35.4m) and Danish (€3.6m) operations the company would have been in serious problems last year.

CFO Anders Kronborg writes in the report:

Metro International was unable to meet a break-even operating result for 2008. This resulted in non-compliance with one of the key covenants of the multi-currency revolving bank facility, triggering the requirement to raise funds to repay the outstanding bank loans of € 28.7 million. Further, the Board of Directors assessed that the Group does not have sufficient working capital to continue the operations, execute the Metro International’s strategy and implement cost saving measures to increase shareholder value.

Kinnevik – the largest shareholder with 44% of shares and 39% of the votes – came up with the new working capital provision for 2009.

As on Metro’s 10% shareholding in Fortunegreen Ltd, publisher of Metro Ireland

an understanding has been reached regarding Metro International’s transfer of this 10 percent share although no final contract has yet been signed.

Metro International expects newsprint price to fall, in November CEO Jensen said would shop in Russia if newsprint price would go up (see previous post) – but instead Metro extended the contract with Swedish paper producer Holmen.

Total fees for Board of Directors, Presidents and Vice Presidents went down from €7.4m to €4.3m, €1.2m is going to CEO Per Mikael Jensen: €646,000 in salary, €336,000 variable remuneration, €118,000 ‘other benefits’ and €136,000 pension costs. In the Scandinavian press, the €336,000 has been called a ‘bonus’ and was criticized. Metro reacted with a press release stating that it “refers to the deffered stock that was agreed with Per Mikael Jensen when he joined Metro” and that Jensen “declined to receive any bonuses for 2008.”

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