23 March 2012 – deferred consideration settlement

The negotiations with Rentokil Initial plc with regards to the final deferred consideration receivable by the company following the sale of its Building Services division have now been concluded.  The deadline for agreement was 5 March 2012, absent which the parties would have appointed an independent arbitrator.  The company’s Board regarded the process of arbitration as highly uncertain and would have resulted in further potentially material cost and delay.

Unfortunately, as a result of the unforeseen cancellation of one of the Division’s largest maintenance contracts just prior to the relevant deadline of 5 March 2012, the proceeds will fall short of expectations.  The cancellation had the effect of materially reducing by far the most substantial element of the deferred consideration.  The company will now make the final outstanding payments to the secured loan note holders and immediately thereafter will consult with the few remaining creditors.  In view of this the company’s Board regards the equity value of the company to be negligible.  Further announcements will be made in due course but with a share price very close to zero there is little point selling.  Although more through hope than expectation of any recovery the shares are a HOLD.