Toscafund Asset Management has called for an extraordinary general meeting which will be held next month.

But this morning Toscafund addressed a letter to Astrand stating: “We believe that it would be in shareholders’ best interests if you were to resign ahead of the meeting to save both time and expense.”

The letter added: “You will by now be aware of the significant shareholder discontent about your track record at Speedy Hire, both in terms of governance and shareholder value creation.

“The simple fact is that you have failed to deliver during your tenure as executive chairman and we do not believe you have the appropriate track record or attitude to oversee the Company’s turnaround.”

Toscafund – which owns nearly 20% in the national hirer – wants to see Astrand replaced with David Shearer whos is a tutnaround specilaist and the former chair of house builder Crest Nicholson.

The letter added: “This is the first time in Toscafund’s 16-year history that we have felt compelled to take such action at one of the companies in which we invest and we do not do so lightly.

“However, given the significant opposition against you, of which I am sure you are fully aware, we believe that your position is untenable for the following reasons:

• Since your appointment as executive chairman in July 2015, the Company’s share price has fallen by 29%. Over a three year period, it has declined by 42% from 60 pence to 35 pence.
• You have proved to be an indecisive business leader. Your previous roles and experience do not justify your current position and remuneration.
• 
• You oversaw prolonged talks with regard to a potential merger with HSS Hire Group plc, which you inexplicably halted without consultation with the shareholders. You are aware that the advisors were comfortable with £20m annual synergy benefits above and beyond cost savings that would be achieved in the ordinary course of business. The merger would have been at least 70% accretive to the annual profit of Speedy Hire and the benefits would have insulated the Company from the effects of a possible UK economic slowdown. The higher core earnings of an enlarged group would have also led to better net cash flow, a subsequent lower level of future indebtedness and a value adde d return on invested capital. However, you were aware that there was unlikely to be a role for you in the combined business.
• Your role as executive chairman is incompatible with the UK Corporate Governance Code, because Speedy Hire already has an effective Chief Executive.
• David Shearer, the proposed new director of Speedy Hire, is a considerably better qualified candidate to help in Speedy Hire’s turnaround. He is an experienced Chairman, Independent Director, Board Level Strategic Adviser and Turnaround Specialist with experience in companies from the listed market, private equity backed businesses and not for profit entities both in the UK and Internationally.
• Importantly for all shareholders, David Shearer is independent of Toscafund and has never previously been appointed to the board of any Company at the request of Toscafund. He will not be constrained by any proposals from Toscafund in relation to Speedy Hire and, following his appointment, will reach his own conclusion as to what is in the best interests of the Company.