Accountants KPMG Peat Marwick estimated that Heron was worth minus pounds 209m in March. Since then, the value of its international property portfolio has fallen further and the pound's decline since leaving the ERM has increased the value of its debt.
With details of the reconstruction plan - codenamed Project Fred - yet to be revealed, Heron would not comment on the likely deficit. But a source close to the group said: 'The new numbers have to take account of currency movements and the general property situation has got worse in the past few months.'
Heron is likely to unveil a debt-for-equity swap under which banks and bondholders would exchange part of their Heron debt for shares. The rest would be replaced by new paper with maturity extending over many years. Heron would then begin a property disposal programme.
Bondholders are hoping the new paper would also be tradable to give them the option of an earlier exit. Heron's Swiss franc bonds are currently trading at only 18p in the pound in Zurich.
One Swiss bondholder has started court proceedings to enforce default on the group. But the bonds were issued by Heron International, a Dutch Antilles company, which is not subject to Swiss law.
The creditors with the best level of security are banks, which have lent to Heron Corporation, the UK property-to- garages business, and to Mr Ronson's European property arm.
After paying these creditors, any remaining funds flow first to bank lenders to the troubled US property division, and last and very much least, to bondholders.
The reconstruction process is likely to take until Christmas. The banks will take some weeks to consider Heron's proposals. Only if they agree will bondholders be approached for their support. And any final package is likely to need court approval.
One source close to the bondholders said: 'At any point in this long process a single creditor could take action forcing Heron into administration or other insolvency procedures.'
Meanwhile, Alan Goldman, Heron's deputy chief executive, is understood to be likely to remain in his job, though the company will probably appoint several experienced non-executive directors.
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