MADRID (Reuters) – The chairman of Spanish telecoms operator Ono is likely to quit at a board meeting on Thursday after pressure from foreign shareholders, a source close to the matter said on Wednesday.
A majority of the foreign investors who control more than 68 percent of the company are unhappy with the management of Eugenio Galdon, the source said.
“It seems certain that the current chairman is going to step down,” said the source, who asked not not to be named.
A spokesman for Ono declined to comment on whether the replacement of Galdon was on Thursday’s agenda.
Shareholders want changes including more cost-cutting at the company, despite Ono having announced at the end of the month plans to cut 1,300 jobs or 30 percent of its total workforce.
The group is facing a sharp economic slowdown in Spain and tightening credit conditions. It has debt of five times its EBITDA (earnings before interest, tax, depreciation and amortisation) from its purchase of rival cable operator Auna in 2006.
Newspaper Expansion said private equity shareholders CCMP, Providence, Thomas H Lee and Quadrangle, which invested in Ono in 2005 and control around 53 percent of its stock, and General Electric (GE.N: Quote, Profile, Research, Stock Buzz) which has 8.7 percent, are among those critical of Galdon.
The paper said it had been unable to find out if Canadian savings bank Caisse des Depots du Quebec, which has 6.5 percent, was critical.
Jose Maria Castellano, an independent board member of Ono who was previously chief executive of Spanish fashion group Inditex (ITX.MC), is favoured to replace Galdon, Expansion said.
Some sources told Expansion shareholders could also call for the replacement of Chief Executive Richard Alden, but others said he could continue until December when he is due to step down anyway.
Ono, which obtained its first telecoms licences in 1996, has rapidly grown in Spain, expanding its fibre optic network across the country.
It is now the only operator which can compete with the ex-state monopoly Telefonica (TEF.MC) in offering high-speed Internet of up to 100 megabytes.
(Reporting by Robert Hetz; Writing by Sarah Morris; Editing by David Holmes)