Good morning! The situation at Silverdell (LON:SID) appears to be slowly improving, as far as I can tell from the extremely limited information provided to shareholders. This has to be one of the most bizarre situations I've ever seen. The group's shares were suspended without warning on 2 Jul 2013, and a two sentence RNS was issued on that day containing the dreaded words, "pending clarification of the Group's financial position", which is almost always terminal when that phrase is used.
However, a statement on 16 Jul 2013 then said that only part of the group (Kitsons) was in Administration, and that discussions with HSBC had reached a "satisfactory outcome".
On 24 Jul 2013 it was announced that Silverdell was buying back the business & certain assets of Kitsons from the Administrator in a deal capped at £8m, funded by bank facilities.
Today's announcement confirms that HSBC has agreed to provide an additional £5m facility to finance the acquisition of Kitsons, up to 31 Jan 2014. So that's good news. Encouragingly it also says that contracts & operations are being moved across "with minimal disruption".
The last sentence confirms what I've been saying for a while, namely that the shares are likely to likely to resume trading at some point in the not too distant future, but will probably open down at least 50% (my guess is 4-6p), and that there will almost certainly be a deeply discounted Placing & Open Offer:
The Group is currently assessing the impact of the administration on its trading performance and therefore the capital requirements of the business for the remainder of FY2013 and for FY2014 in order to work towards lifting the suspension from trading of the Group's shares.
In these bizarre circumstances, where a large chunk of the Group seems to have fallen into Administration by accident (these things can happen - if important legal documents gather dust in someone's in-tray, instead of being acted on), then a fund-raising from equity holders is now a near certainty.
It is vital that the interests of all existing shareholders are respected - so retail investors MUST be given the opportunity to invest in the next fund-raising on the same terms as Institutions. Yes, it costs more to prepare the relevant documentation, but I think the group…