Equatorial rescue debated

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The Independent Online
THE administrators of Equatorial Bank, the Asian bank that failed in March, are in talks with 'two or three parties' about a possible rescue, writes Peter Rodgers.

After a meeting of 150 creditors in the City of London, Gareth Hughes, one of the joint administrators at Ernst & Young, said he hoped to determine 'fairly shortly' if the proposals on the table were real possibilities.

Equatorial is being put into a company voluntary arrangement, approved yesterday by the creditors, that gives the administrators flexibility to consider rescue plans.

If they do not work, the administrators will repay creditors as much as possible by running down the bank. The meeting lasted more than four hours and representatives of 320 creditors were present, including proxies.

Proposals for a rescue have come from within the Gujurati business community that makes up most of Equatorial's shareholders and customers. But there was scepticism among Asian businessmen about whether a rescue would work unless a bank stepped in to take over.

An offer by Meghraj, another Gujurati bank, to manage Equatorial's loan book for a fee has been turned down.