Baltic Exchange Dumps Restructuring Plans

The Baltic Exchange is dropping plans to restructure the world's oldest shipping market as a mutual body. "The board has decided not to develop detailed proposals for a change in the governance of the organization," a Baltic Exchange spokesperson said. The decision reflects excessive financial expectations held by a minority of shareholders for their holdings in the existing company. A 75 percent majority by share value is required to change the Baltic's articles of association. In October the Baltic revealed plans to adopt mutual status to overcome conflicts between shareholders over the use of assets. Shareholders were split between those seeking a commercial return and those wanting to retain the exchange's status as an institution serving the wider maritime community. A growing number of shareholders were seeking large dividends from the investment earnings on a 27 million pound insurance payment on the IRA bombing of the old exchange in 1992. But others did not want to see the Baltic reduced in scope as a result of asset stripping. Exchange officials said there had been widespread support for a change to mutual basis. "But we identified a sufficiently large minority above the 25 percent required to prevent the plans going ahead with expectations of a share price way above the price the board had in mind," Baltic Exchange chairman Jim Buckley told Reuters. "It would have downsized the Baltic so much as to make it unattractive to a majority of our members," Buckley said. However, the board will take into consideration consultations it had held with about 60 percent of shareholders by value and those views would be reflected in future dividend policy. Payments will be higher, Buckley indicated, "but restructuring is now off the agenda," he said. - (Paul Berrill, Reuters)