Invesco to seek stay on order

Press, 4 March 1988, Page 12

Invesco to seek stay on order

By

Special correspondent

Invesco Group, which the High Court ordered on Tuesday should be wound up, has appealed the decision and will apply 'for a stay of execution on the winding up order. A hearing is set for today. Legal costs associated with the action are to be underwritten by two financiers — part of a group of bankers, financiers, and major creditors which has been working with the directors for more than three months on the formulation of a scheme of arrangement for repayment of creditors that is fair and equitable to all. The directors said yesterday that they firmly believe that the winding up of the company is not in the best interests of either the creditors or shareholders of the group. Invesco floated to the public in June, 1985, with an issue which raised $9.6 million. Listing was completed in July that year. The company reported a net profit of $777,000 for the six months to September 30. The earnings were down from 55.2 million in the corresponding half of 1986. Strategic Capital, the listed, associate, was placed in receivership in December. ■ j In. January, the wholly-; owned subsidiaries in the bedding operation were also placed in receivership. Some properties were sold in February to improve liquidity, and the sale of the

2& per cent stake in Triumph Industries, for $418,000, was reported on Tuesday. j The directors said last month that the company's assets were now concerned mainly with well-located investment and development properties with excellent profit potential. I The chairman, Mr R. S. Stubbs, said yesterday that the proposed scheme of arrangement would have provided some opportunity for Invesco Group to continue as a going concern once the level of debt was reduced to an acceptable level. It was for this reason that the decision had been taken to file a notice of appeal and make an application for a stay of execution of the winding up order, he said. The purpose of the scheme was to provide sufficient time to allow an orderly realisation of subsidiary company assets and ensure that property company developments, either under way or at an advanced stage of negotiation, were able to be completed to the maximum benefit of the group, its creditors, and shareholders. Invesco Group’s assets are almost totally shares in subsidiary companies mainly concerned with property investment and development. Subject only to interlocking guarantees of the parent company each of the subsidiaries is independent and has its own debt structure. No subsidiaries have given guarantees of the parent company's indebtedness.

The scheme of arrangement was proposed as the only practical means whereby unsecured creditors would have any real prospect of receiving payment of all their debts, Mr Stubbs said. If the company was unable to set aside the winding up order made against it, the prospect of a dividend to unsecured and secured creditors in respect of the shortfall of their security would be considerably reduced. Although it might appear that excessive time had been taken in completing arrangement for the scheme, 15 banks or finance houses had been consulted and their agreement in principle obtained. Final agreement from the debenture holders and the major contingent creditors was received last week, he said. Should the appeal against the winding up order succeed, Invesco say’s it is in a position to file an application to the Court to convene formal creditors' meetings to consider the scheme almost immediately. Stubbs Developments was on the brink of concluding negotiations relating to a SI6M commercial office development, Mr Stubbs said. Leasing arrangements were being finalised and negotiations with a financial partner were well advanced.

These negotiations would be jeopardised by the winding up order on Invesco Group.