Hume Capital Securities PLC Statement Re: Financial Position and Client Assets (3386H)
March 12 2015 - 1:13PM
UK Regulatory
TIDMHUME
RNS Number : 3386H
Hume Capital Securities PLC
12 March 2015
12 March 2015
Hume Capital Securities plc ("Hume" or the "Company")
Statement Re: Financial Position and Client Assets
Financial Position of the Company
The Board of Hume Capital Securities plc ("Hume" or the
"Company") requested suspension of trading in its shares at 7.30
a.m. on 11 March 2015 pending clarification of its financial
position. With effect from 8.00 a.m. on 12 March 2015 Hume's
membership of the London Stock Exchange was suspended.
In the last annual accounts it was stated that a further
significant equity capital injection into the Company would be
required in 2015. Substantial cost savings have been made in the
business since last June, when the planning for the refinancing
began. It has, however, become apparent that the legacy losses and
costs of the business are too high and the current revenue
generation of the business too low to resolve the capital shortfall
to the satisfaction of our regulators without a capital injection
at a level which is a significant multiple of that which was
envisaged last June.
Whilst the pipeline of potential new business across all
divisions is now looking stronger than it has for some time, the
timing of potential revenue receipts is nevertheless too far out or
too uncertain to tide the business over in the short term. The
Board has therefore reluctantly concluded, after consulting with
the cornerstone investors and debt providers who have supported the
business to date, that an underwritten fundraising at a level
likely to provide the requisite capital and satisfy the Company's
primary regulator for its authorised business is not commercially
viable.
The Board appointed insolvency practitioners Leonard Curtis and
legal advisors DWF LLP to explore options for the continuation of
the business but has reluctantly had to conclude that the only
option open to the Company is to appoint administrators.
As the Company falls within the ambit of The Investment Bank
Special Administration Regulations 2011 ("SAR"), we intend to apply
to the court for the appointment of administrators under the SAR
regime, which is expected to take place within the next few days. A
further announcement will be made following any appointment of a
Special Administrator.
The SAR regime has as its objectives, inter alia, the return of
client assets as soon as is reasonably practicable and to rescue
the Company as a going concern or to wind it up in the best
interests of the creditors.
The SAR dictates the timing and manner in which client assets
will be dealt with - which is a matter beyond the control of Hume
or its Board.
As a consequence, of the above and after discussions with the
regulator, Hume has applied for a requirement ("Requirement") which
the FCA has imposed on it under section 55L(5) of the Financial
Services and Markets Act 2000.
Without the FCA's express prior written consent, Hume must
not:
-- carry on business that involves the carrying on of a
regulated activity, except where necessary to settle any existing
contracts to which it is a party;
-- initiate any further business, including accepting a new
client or a new order for an existing client;
In addition, the Hume must not deal with or release client money
unless it is:
-- receiving client money into its client bank accounts in
compliance with the Client Assets Sourcebook in the FCA Handbook
("CASS"); or
-- otherwise dealing with or releasing client money with the
FCA's express prior written consent.
Hume must not in any way dispose of or deal with any of its
assets without the FCA's prior written consent.
Client Assets
The Board of Hume continues to oversee the custody of client
assets in accordance with the CASS requirements of the FCA
Handbook. Hume will act in accordance with the FCA's expectation to
ensure appropriate protection and fair treatment of customers.
As a result of the Requirement, the Company is unable to release
to clients any funds at this time without the FCA's consent in
order to ensure that all customers are treated equally and in an
orderly fashion.
Should clients have any queries we have a dedicated telephone
number for that purpose. Please do not hesitate to call 01282 610
638.
Enquiries:
Hume Capital Securities plc
Guy Peters (Chief Executive Officer) 020 3693 1492
Grant Thornton UK LLP, Nominated Adviser
Philip Secrett /Melanie Frean/ Jamie Barklem 020 7383 5100
This information is provided by RNS
The company news service from the London Stock Exchange
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