Mouchel shareholders reject plan; appointment of administrators sought

By Caroline Salls

Pittsburgh, Aug. 24 - Mouchel Group plc has applied to the High Court for the appointment of administrators following a general meeting at which shareholders rejected the company's proposed restructuring plan, according to a news release.

Mouchel said the request is the first step in implementing an alternative plan to achieve a restructuring of the group's capital structure.

The new plan involves an alternative mechanism to implement the commercial principles of the restructuring. The company said this plan will safeguard the businesses within the Mouchel group and the interests of the group's employees, customers and suppliers.

According to the release, the company's discussions with its lenders have been successfully concluded and the terms of the alternative plan have been finalized.

Asset sale

Following their appointment, Mouchel said the administrators would immediately sell the company's assets to a newly incorporated company.

Following the completion of the alternative plan, the company is expected to be owned by affiliates of lenders RBS, Lloyds Banking Group and Barclays and management.

No dividend

Because the restructuring was not approved, Mouchel said shareholders will not receive the proposed special dividend and, given the level of existing debt owed by the group, the expected sale by the administrators will result in shareholders not receiving any value for their shareholding.

Mouchel said no other company in the group is expected to enter any insolvency process. As a result, no employees, customers or suppliers are expected to be significantly affected.

"While it is unfortunate that shareholders have chosen not to approve the terms of the restructuring, and in doing so have declined the opportunity to receive the special dividend of 1p per share, the board is pleased that the restructuring of the Mouchel group's balance sheet can be implemented by an alternative mechanism," Mouchel chairman David Shearer said in the release.

"The board believes that the group's businesses are stable and that the expected sale and related transactions will provide them with a sustainable capital structure for the future."

Listing suspended

In addition, the company said the listing of its ordinary shares on the Main Market of the London Stock Exchange was suspended following the general meeting.

The administrators are expected to ask the U.K. Listing Authority to cancel the admission of the ordinary shares on the authority's Official List.

All of the group's trading subsidiaries should continue to trade as usual, the release said.

Mouchel is a London-based consulting and business services company.

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