News Flash

Abbeycrest announces plan to Refinance facility

16 Jun '06

5 min read

- by taking the decision to effect the Disposal to raise cash, the directors are acting in the best interests of the Company and shareholders as a whole and unless the Disposal is completed, in accordance with the timetable which does not allow sufficient time to seek shareholder approval, Administrators are likely to be appointed; and The Directors believe that the Disposal is in the best interests of the company and shareholders as a whole.

The Directors confirm that further negotiation with HSBC, the company's existing bankers, would not have allowed time for shareholder approval. All alternative methods of financing had been exhausted and the only option remaining was the Disposal of a substantial part of the business. HSBC confirmed that further finance would not have been made available and, unless the Disposal and Refinancing was effected, facilities would have been withdrawn.

The company's sponsor, Hoare Govett, has confirmed that, in its opinion and on the basis of the information available to it, the company was in severe financial difficulty and that it would not have been in a position to meet its obligations as they fell due unless the Disposal took place according to the proposed timetable.

The overall state of the jewellery market in the UK has been, and remains, extremely challenging. The UK Assay Office statistics (detailing volumes of jewellery hallmarked) which were referenced in the half-year statement have not improved. The weight of gold hallmarked in the calendar year 2005 was 25 percent lower than 2004.

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