Ossory seeks pounds 5.5m in restructuring

OSSORY ESTATES, the property company that has been teetering on the brink of oblivion for the past 18 months, has revealed plans for a financial reconstruction.

If approved, the restructuring could see existing ordinary shareholders' interests diluted from 100 to 6.9 per cent.

But Ossory said that if the deal was blocked, 'the company will be unable to continue trading and will have no alternative other than insolvent liquidation, administration or receivership'.

The company hopes a placing and open offer of new shares will raise pounds 5.5m of working capital. The placing and open offer price is 1p. In the market shares fell from 2.75p to 1.75p yesterday.

Even after the reorganisation Ossory will have debts of pounds 66m - pounds 3m more than its assets. Banks have agreed to write off - or swap for equity - debts of pounds 23m.

Refinancing proposals came alongside news that Ossory lost pounds 41m in the year to 30 June. In the previous year it lost pounds 42m. Both sets of losses were due to write-downs in property values.

The company's board has been revitalised. Christopher Spence, chairman, and Norman Turner, managing director, have resigned and are to be replaced.

David Sebire, a director of the merchant bank Henry Ansbacher, will become chairman and William Higgins chief executive.

Ossory will buy six properties controlled by Mr Sebire and Mr Higgins, both experienced property men who became involved at the request of banks.

The two men plan to sell many of the old Ossory properties to cut borrowings.

Mr Sebire and Mr Higgins have bonus schemes based on share options by which they could qualify for ownership of 10 per cent of the company.

The reconstruction will reduce the deficit in the profit and loss account from pounds 73m to pounds 25m but the company said it was unlikely to pay dividends in the near future.

Ossory is to rename itself Orb Estates.