25 July 2011 – update
AssetCo has been in discussions with North Atlantic Value LLP, a part of the J O Hambro Capital Management Group, Utilico Investments Limited and Henderson, which incorporates the interests of Gartmore Investments Limited, which are major stakeholders who are said to have remained supportive. As a result, a refinancing proposal has been received from the aforementioned group of investors which would involve a £10m equity injection into Assetco and compromises with certain creditors, to be implemented through a scheme of arrangement. It is anticipated that certain other existing institutional shareholders will also be allowed a participation in this equity fundraising. The proposal is likely to require shareholder approval.
The company’s strategy moving forward will be to focus on developing the Middle-East business into a leading emergency services platform and on running the London and Lincoln contracts. The refinancing proposal to be approved by shareholders will involve the ring-fencing of the LFEPA Contract, for the benefit of the London subsidiary lender group, although shareholders will retain an interest in any residual value. AssetCo is likely to keep its AIM listing if the proposals are successfully implemented. However, the proposals would involve material write downs for banking creditors and preference shareholders, as well as significant dilution for existing shareholders. A further adjournment of the Administration application will be sought at the Court Hearing today.
Discussions with a potential offeror have reached a very advanced stage but the company has not been able to reach agreement. As the potential offeror also needs to reach agreement with the banks, there can be no certainty that there will be an offer made. There is little that shareholders can do other than AWAIT DEVELOPMENTS.