Hongkong fear triggers plunge at Trafalgar
Thursday 19 October 1995
The company is expected to issue a statement today to reassure investors about its financial position and the support of Hongkong Land. It is understood that there will be a brief trading update although full details are not expected before the December announcement of results for the year to September - when extensive balance-sheet write-downs are anticipated.
The shares closed 2.5p lower at 21p last night, at which point they have lost three-quarters of their value this year. Some deals yesterday were struck as low as 18p as investors scrambled to get out. The company's 6 per cent convertible preference shares fell 4.25p to 43p, at which point they notionally yield more than 17 per cent, indicating the market's scepticism that the coupon will ever be paid.
The crisis at the group, whose struggling subsidiaries include the Cunard line, has intensified in the past 10 days since the cash-raising disposal of the Ritz hotel to the secretive Barclay brothers was announced.
Although Trafalgar raised pounds 75m from the sale, that is expected to only match the loss that the group will announce in December. Trading has remained poor across the range of Trafalgar's operations. Analysts said yesterday they had been frustrated in their attempts to speak to the company recently and remained in the dark about its financial strength.
PDFM, the fund manager, which is rumoured to have been a heavy buyer of the shares on the way down, refused to comment on its position last night. It is believed to have been involved in an agency cross of 28 million shares yesterday.
Hongkong Land's frustration with its 26 per cent stake in Trafalgar follows its injection of more than pounds 300m since 1992. The stake was to have formed an insurance policy for Land's parent, Jardine Matheson, ahead of the Chinese takeover of Hong Kong in 1997, but it has proved a disastrous investment.
Writing off the investment will cause a serious loss of face for the Keswick family that controls Jardine Matheson, and for Nigel Rich, the former Hongkong Land managing director, parachuted into Trafalgar in September 1994 to turn the company around.
Yesterday's fall was the latest blow in a dreadful year for Trafalgar which has included the QE2's ill-fated refit cruise, the failed Northern Electric bid and losses for the six months to March of pounds 48m.
- 1 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 2 Dog thinks owner is drowning in lake, dives in and tries to pull him out
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
- 5 Phil Neville backtracks on Tomas Rosicky 'I'd smash him' comments from Match of the Day 2
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Greece elections: Greek PM Alexis Tsipras takes aim at 'neo-liberal' Europe as country gears up for prolonged austerity battle
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Pornhub star Mia Khalifa receives death threats after being ranked the site's top adult actress
Prince Philip set to be knighted by Australia: Celebrate by reading his greatest gaffes
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
Leaked documents show Ukip leaders approve NHS privatisation once it becomes more 'acceptable to the electorate'
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...