DX Group top bosses to go as business separates into two units

(Adds comment from top investor)

By Rahul B

July 14 (Reuters) - British mail delivery company DX Group said on Friday its chief executive and finance director will step down with immediate effect and it will separate its operations into courier and freight divisions.

The reorganisation follows DX's agreement in June to acquire John Menzies (LSE: MNZS.L - news) ' distribution arm via a reverse takeover.

DX said it would split its business into DX Express and DX Freight and the reorganisation would give greater flexibility in managing costs.

Nick Cullen, its current chief operations officer will head DX Express and Stuart Godman, currently chief commercial officer, will be head of DX Freight, it said.

Chief Executive Officer Petar Cvetkovic and Finance Director Daljit Basi will step down from the board with immediate effect.

DX named James Hayward as its interim chief financial officer, making a non-board appointment.

On July 7 the group said it had made changes to internal businesses processes at its collection and delivery service DX Exchange, after a preliminary police investigation last month which was later dropped.

"The changes we are making both to the board of directors and to the group's operational structure are aimed at supporting business transformation," Chairman Bob Holt said in a statement.

Menzies, in a separate statement, said it will continue to work with DX to establish the impact, if any, of DX's announcement on the proposed deal.

DX Express will comprise the DX Exchange, DX Secure, the courier operations and mail activities while DX Freight will comprise Logistics, DX 1-Man (Swiss: MAN.SW - news) , and DX 2-Man, the company said.

DX is preparing to buy Menzies' distribution arm in a deal aimed at bolstering DX after a February profit warning that cited a challenging courier market and margin pressure in its freight business.

DX is one of several big operators in the crowded parcels market, where DHL-owner Deutsche Post (IOB: 0H3Q.IL - news) has bulked up by buying UK Mail (LSE: UKM.L - news) and Amazon has started its own deliveries.

Top DX investor Gatemore, which in May upped its stake in the company to 21 percent and had been pushing for changes, said it was pleased with the moves.

"Our working relationship with the board has become more productive," managing partner Liad Meidar said in a statement. (Additional reporting by Maiya Keidan and Carolyn Cohn; Editing by Susan Fenton and David Evans)