London Securities strives to stay afloat
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Your support makes all the difference.LONDON Securities, David Pearl's deeply troubled property company, is proposing a voluntary arrangement with its creditors to keep itself afloat.
Announcing increased interim pre-tax losses of pounds 6.5m (pounds 5.3m), the company warned that a forced sale of assets through a formal insolvency would result in a overall deficit of approximately pounds 13m. 'Continuing to trade over a two-year period may generate surpluses in excess of the liabilities which currently exist,' it said.
London Securities will ask creditors to limit claims to existing assets and to relinquish claims to cash or assets acquired after the adoption of the voluntary arrangement. Shareholders must approve the arrangement.
At the end of the proposed two-year agreement, London Securities would not have to make good any shortfall that might arise on the disposal of existing assets.
The company's capital will be reorganised so that shareholders will have one new share for every 35 they hold, and preference shareholders will have two new shares for every seven preference shares. London Securities also plans to issue as many as 50 million new shares at 1p each in an attempt to raise just pounds 305,000. Mr Pearl intends to underwrite half the shares on offer with his personal pension fund.
The company suffered increased losses on property disposals of pounds 3.6m in the six months to 31 March.
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