Euro Sales Finance offer may yield low premium

Euro sales finance, the troubled provider of bridge finance, said it was in the final stages of bid discussions but warned the offer, if made, would value the company at only a small premium to its £64m net asset value.

The company, which said it was still in the process of finalising its accounts for the year ended 30 June, also noted its draft accounts showed heavy exceptional items would force it into a pre-tax loss of £10.9m from a pre-exceptional profit of £7.9m.

The exceptional items relate to higher lending costs as well as extra provisions for bad debts.

As at 30 June, Euro Sales Finance's net asset value was approximately £64m or 414p a share down from £77m or 498p a share at 31 March, it said.

Shares in Euro Sales Finance closed down 31.4 per cent yesterday at 387.5p, well beneath their £17.73 peak reached in February of last year.

The stock collapsed in April after the company warned that profits would be beneath market expectations and admitted it had been overly ambitious in its growth strategy in continental Europe.

It is believed that Euro Sales Finance's bankers refused to increase the level of lending to the company.

Both the bridge finance provider's finance director, Bernward Rohmann, and its chairman, Alex Hammond-Chambers, have subsequently parted company with Euro Sales Finance.