Deal looks hopeful at London Securities
Monday 12 October 1992
The company and its advisers are hopeful the deal will be agreed, making it the first creditors' voluntary arrangement by a publicly listed company that kept its listing throughout.
A similar move by West Industries, the engineering group, failed earlier this year and it is now in receivership. Chancery, the financial services and property company, agreed a voluntary arrangement but its shares had been suspended and administrators appointed.
The aim of a voluntary arrangement is to produce a better return for creditors than possible if a receiver was appointed immediately. It also holds out the prospect of some return for shareholders.
London Securities estimates that a forced sale of its properties and investments would mean a shortfall of pounds 13m. David Pearl, chairman, said: 'If they are left alone to recover or mature, they could produce more than is likely to be raised now.'
The group also aims to raise between pounds 90,000 and pounds 305,000, net of expenses, through a rights issue to provide working capital for the two-year term of the arrangement. This has been partially underwritten by Mr Pearl.
Lawrence Graham, the law firm advising on the arrangement, believes it could offer a solution to other property companies hit by the market's slump.
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