Heron expects vote to save it

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The Independent Online
HERON, the embattled property-to-petrol-pumps group, is quietly confident that bondholders will save it from liquidation by voting for its pounds 1.4bn restructuring.

The first round of voting will be decided at a bondholders' meeting in London tomorrow when Heron is expected to announce that it has successfully completed a further pounds 100m of asset disposals. There are also meetings scheduled in the Netherlands on Wednesday and the Netherlands Antilles on 5 July.

Oliver Paul, managing director of corporate finance at UBS, Heron's financial advisers, said: 'The company is very encouraged by the feedback that we have received on the voting intentions of bondholders.'

More than 11,000 bondholders representing debts of pounds 450m must approve the restructuring by a majority of 75 per cent for it to go ahead. A no vote in any of the three jurisdictions will mean liquidation, and probably no money at all for bondholders, Heron and its advisers insist.

Insolvency specialists from Price Waterhouse have concluded that there would be no alternative to liquidation if the plan was rejected. Such a winding-up process would unleash an orgy of litigation in Europe and the US, PW says.

If the bondholders give the thumbs up then the courts will ratify the plan in mid-July.

Gerald Ronson, chairman of Heron, announced on Friday the sale of The Bridges, a 250,000 sq ft shopping centre in Sunderland, for pounds 39m. Mr Ronson said he was confident that Heron could continue to sell properties above the forecasts in the restructuring business plan.

The plan, which offers bondholders senior and junior debt and equity in return for their bonds, has taken 18 months to negotiate and has already been unanimously approved by Heron's 82 banks.

Several parties representing bondholders have expressed bitter opposition to the plan, including the London-based bond trader Gary Klesch. They argue that the company has released insufficient information and that the banks get a far better deal than they do. They are also incensed by the fees paid to Heron's advisers for producing the business plan, which have already topped pounds 50m.

(Photograph omitted)

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