Page 4 - Stakis B Case Study

some time ago by Andros Stakis and approved by Sir Lewis.
Alex Pagett, head of corporate communications, said that

the company was continually reviewing staffing levels. In

any case Sir Lewis was determined to put all the bad figures
up front at the first available opportunity.

Despite the fact that the share price had fallen from 94

pence to between 36 and 40 pence Sir Lewis said, "gearing
at 66 per cent is not a crisis level", although he hoped to

bring it down to around 33 per cent within months and

eventually to 25 per cent. There was also the prospect of a

rights issue at some time in the future which would help to
reduce the gearing.

The Prognosis

Perhaps the most difficult decision to be made by Sir Lewis

was the removal of Andros Stakis as managing director, in
May 1991, a move which is said to have distressed Sir Reo

who, however, made no comment. Perhaps Andros's

resignation was inevitable in the face of the announced loss

of £45.1 million for the six months to March 31 1991. Sir
Lewis commented that, the company had suffered,

"financial and other stress, following ambitious
development programmes"

and the problems partly reflected