29 June 2011 – court hearing

At a Court hearing in relation to the creditors’ petition for the winding up of AssetCo, brought by Northern Bank in connection with their loan of £1.3m, the hearing of the petition was deferred for 12 days until 11 July 2011.  At the hearing a week on Monday, the court will be asked to consider a range of options for AssetCo in the light of progress made by that date.  These options will include further postponement, the grant of an administration order, for which an application was submitted earlier today, or the grant of the winding up petition.  There is potential for further petitions from HMRC in relation to subsidiaries, which the company will consider in due course.  However, these are not anticipated to be heard until late August 2011.

The deferral of the hearing was requested by AssetCo, to enable it to continue ongoing discussions with potential offerors and on potential refinancing.  The company has stated that these discussions have now reached an advanced stage, although there can be no certainty at present that they will result in an offer for the company being made or any re-financing taking place.  If an offer is made, then at this stage, AssetCo’s directors do not anticipate that it would be in excess of the current share price.  The company has said that it continues to review all the options open to it in order to maximise the return to its various creditors and shareholders.

Overall, this is disappointing news and the share price should logically move lower.  There seems little point in selling at these levels even though there is now a risk that shareholders will be left with nothing.  HOLD.