Reuters: Bankruptcy News: UPDATE 2-Mouchel calls in administrators, rescue plan rejected

Reuters: Bankruptcy News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 2-Mouchel calls in administrators, rescue plan rejected Aug 24th 2012, 18:02 Fri Aug 24, 2012 2:02pm EDT * Assets to be sold to existing lenders, management * Shareholders to receive nothing * Mouchel's businesses will continue to trade as usual By Neil Maidment and Rosalba O'Brien LONDON, Aug 24 (Reuters) - British public services contractor Mouchel said on Friday it had called in the administrators after shareholders rejected a last-ditch restructure proposal. The firm, which has struggled to recover from a 2011 dominated by contract blunders, management resignations, failed takeover bids and tough trading, said it expected the administrators to now sell its assets to a new company owned by its creditors and the management. The move into administration would not materially affect its daily operations and all of its subsidiaries would continue to trade as usual, said Mouchel, which helps build and maintain Britain's motorways, roads and schools. Earlier on Friday shareholders had rejected a plan that would have seen its lenders swap 87 million pounds ($138 million) of existing debt for a majority stake in the company. Under the original restructuring proposal Mouchel's shareholders were to receive a special dividend of 1 pence per share, but will now receive nothing. "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," said the company's chairman, David Shearer. Chief Executive Grant Rumbles told Reuters he was disappointed by the rejection and could not understand why shareholders, most of whom are no longer institutional investors, had voted against the plan. The proposals had required 75 percent shareholder acceptance but the resolutions all received between 68 and 72 percent, with many not voting at all. The company, which rejected a 330 million takeover bid from VT Group in 2010 and further bids from Costain and Interserve last year, has seen its value dribble away as it revealed accounting errors and saw its public sector clients retreating on spending in the face of government cuts. Last week, Milton Keynes local authority council became the latest to announce that it was bringing most of the services Mouchel provided back in-house. The company's shares have fallen from highs of around 485 pence in 2008 to change hands for 0.95 pence on Friday before trading was suspended. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions