Hirco plc Suspension (8266L)
15 August 2013 - 5:27PM
UK Regulatory
TIDMHRCO
RNS Number : 8266L
Hirco plc
15 August 2013
15 August 2013
HIRCO PLC
(the "Company")
Suspension to trading on AIM
The Company has requested the suspension of trading of its
shares on AIM pending clarity on its financial position due to the
potential enforcement matters outlined below which may have a
material impact on the financial position of the Company.
The Company has received copies of statutory notifications dated
30 and 31 July 2013 from lenders to Sunny Vista Realtors Private
Limited (the Indian project company which owns the Panvel property)
alleging that certain repayments under their respective loan
agreements have not been met, that the loans are in default (in one
case, wilful default), and that if the loans are not repaid in full
together with interest within 60 days, enforcement action will be
taken against Sunny Vista. The total sums stated to be now due are
approximately 360 Crores (circa GBP37.66m) plus interest. The
notices state that Sunny Vista is not permitted to transfer any of
its assets without the relevant lenders' consents. However, the
extent of the security over the assets which are to be the subject
of enforcement is as yet unclear, as are the circumstances
surrounding such enforcement.
The Company has also received copies of a petition from Tata
Capital Financial Services Limited against Hiranandani Palace
Gardens Pvt Ltd, the Indian project company which owns the Chennai
Township residential development. The petition requests the High
Court of Bombay to appoint a provisional liquidator over
Hiranandani Palace Gardens pending a hearing to appoint a
liquidator and demands that Hiranandani Palace Gardens be ordered
to deposit 82 Crores (circa GBP8.58m) plus interest at the Court.
The evidence in support of the petition alleges irregularities in
connection with obtaining the loan from Tata, that the company is
commercially insolvent and unable to pay its debts in the ordinary
course of business as and when they fall due, and that the
management should not be allowed to carry on its business any
further as that will inevitably result in incurring further debts
with no reasonable expectation and/or capacity to repay the
same.
These loans are obligations of the Indian project companies and
are not of Hirco Plc. The common equity in the Indian project
companies is held by "the Burke Companies," Mauritius domiciled
companies owned by interests associated with the Hiranandani
family. Because the Company is not a party to these loan
agreements, it is not a party to these proceedings. Nonetheless, it
is endeavouring to establish further information regarding the
enforcement action and the potential consequences in relation to
the value of the preference shares the Company holds. The Board is
seeking information on these points so that the financial position
of the Company can be clarified.
Separately, the Board wishes to disclose information which has
come to light in respect of a potential offer for the projects held
through the Burke Companies. The Board understands that the Burke
companies received an indication of a potential offer some months
ago which, if made, would be to purchase the entire issued share
capital of the Indian project companies they own. Since becoming
aware of a potential offer, the Board has been seeking to establish
further information which may verify and confirm the validity of
such potential offer. The Board's current understanding is that if
that potential offer were made, accepted and implemented, the Burke
Companies would be able to redeem the Company's preference shares
in return for GBP100 million (payable over a number of years) in
full and final settlement of the Company's rights in those shares.
The Board has now received information that an indicative timetable
has been received by the Burke Companies outlining the process to a
potential offer and also that due diligence work has commenced. In
light of this, the Board feels that the indication of an offer may
have substance and is seeking further clarification.
The Company cannot be certain that an offer in an appropriate
amount with appropriate legal protections guaranteeing payment
would be made for the shares of the Indian project companies, that
the various boards of directors would accept such an offer, that
any third party consents or approvals would be obtained, that the
Company would receive proceeds from any transaction, or that any
proceeds would ultimately be distributed to Company
shareholders.
Notwithstanding these developments, the Company continues to
pursue redress through the litigation and arbitration proceedings
which are ongoing.
The Company requested a suspension of trading in its shares on
AIM pending clarity on the financial position of the Company
pursuant to any of the enforcement actions and will seek
reinstatement of trading in the Company shares once the Company is
in a position to make a full announcement on this issue in
accordance with AIM Rule 10.
For further information please contact:
IOMA Fund & Investment Management Limited Tel: +44 (0)1624 681250
Philip Scales
N+1 Singer Tel: +44 (0) 20 7 496 3000
James Maxwell/Nick Donovan
This information is provided by RNS
The company news service from the London Stock Exchange
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