Nagle to meet with Payzone directors this week

Payzone's board of directors will meet at the company's head office in Sandyford, Dublin, tomorrow but will not discuss the legal proceedings under way between the company and its chief executive John Nagle and chief financial officer John Williamson.

It is understood Mr Nagle will present the board with an update of Payzone's operational performance since the merger of Irish electronic payments group Alphyra and UK ATM operator Cardpoint six weeks ago.

The Irishman is expected to inform the board that Cardpoint failed to perform to expectations between October and December - the first quarter of its financial year. Cardpoint's earnings are believed to have been more than 20 per cent behind expectations.

Alphyra, however, has performed in line with expectations. In addition, the company secured a lucrative contract this month to handle payments for the operation of barrier-free tolling on the M50 motorway in Dublin.

Mr Nagle is also expected to address the issue of a meeting with the company's lenders, which include AIB, Rabobank and Abbey.

Payzone has debts of €300 million, and the banks collectively are believed to be seeking a meeting with Mr Williamson for an update on recent events.

Mr Nagle is believed to have spent much of the weekend at Payzone's head office in Dublin preparing for the board meeting.

This will be the first scheduled meeting of the company's board since it was created on December 5th, and will bring together Mr Nagle and Payzone chairman Bob Thian, who sought to take charge of "executive responsibilities" at Payzone last week.

Payzone dismissed the two executives last Tuesday night. The pair secured a High Court injunction against their dismissal the following day.

On Thursday trading in Payzone's shares was suspended on the Alternative Investment Market (AIM) in London pending the outcome of the legal action.

Separately, Mr Nagle, who founded Alphyra and owns 10.5 per cent of Payzone, is this week expected to canvass support for his position from the company's shareholders.

Sixty per cent of shareholders are reported to support the decision to remove Mr Nagle and Mr Williamson from their posts, including private equity group Balderton Capital, which owns 40.5 per cent of the business.

Balderton had supported the management buyout of Alphyra in 2003 and has one representative on the board, Mark Evans a former Goldman Sachs executive. Relations between Balderton and Mr Nagle have been strained in recent times.

The High Court action between the two sides was adjourned on Friday evening and is expected to resume this week.

Mr Nagle claims the chairman Mr Thian is pursuing "a personal agenda" to deflect attention from the underperformance of Cardpoint and to "transfer blame" to himself and Mr Williamson.

Payzone argued in court last week that the two executives no longer had the confidence of other board members.

Mr Thian has said that morale at Cardpoint was low and that 25 per cent of the company's ATMs were inoperable over Christmas.