OEM OEM

 

TIDMOEM 
 
RNS Number : 3876X 
OEM PLC 
03 December 2010 
 
OEM Plc 
The Directors regret to report to the Shareholders that, having taken advice, 
the Company must be placed into a Corporate Voluntary Arrangement (CVA).  This 
type of Arrangement is designed to provide a solution for the creditors of the 
company and to also try and deliver up the best possible outcome for the 
Shareholders, assuming the arrangement is successful and a desirable outcome can 
be achieved. 
In view of their successful assistance with the recovery of funds previously 
misappropriated and prior to 2005 by the Company's former Finance Director, UHY 
Hacker Young, a leading turnaround and recovery specialist have been appointed. 
Shareholders will also be aware that the Company's principal asset was its 
interest in the development of Ham Yard ('the Development') in which London & 
Newcastle ('L&N') funded by HBOS, were to be a joint venture partner. 
By virtue of loans and services supplied to the joint venture partners, the 
Company had established a 20% interest in the Development.  During 2006 and 2007 
the Company was extremely hopeful of a successful outcome. 
Regrettably, HBOS, the principal funder of L&N failed and very shortly 
thereafter L&N withdrew from the proposed venture. 
Without L&N's involvement, servicing Bank Leumi's debt became problematic for 
the site's owner. Consequently, the Directors decided that, in view of the 
Company's potentially significant financial interest in the Development, it was 
in the Company's best interest to support the debt service to avoid the adverse 
financial consequences of Bank Leumi re-possessing the property. 
The Directors believed that such financial support would facilitate the 
necessary time for an orderly sale of the project to be completed. This 
additional investment in the Development was made possible by the earlier 
recovery of funds as referred to above.  The Chairman undertook the majority of 
the negotiations concerning the investments and eventually authorised the 
release of the support in an attempt to keep the Development on track for a 
successful outcome. 
In addition, further investments were made into a series of smaller projects 
also linked by associated party rules to the owners of the investment in the 
Development and this largely accounted for the disbursement of the majority of 
the recovered funds. 
The company also disposed of its interests in its subsidiary companies during 
this period. 
During 2007 the Company permitted the release of a charge over security on two 
properties in London on the basis of recovery of a debt.  The funds generated 
were also authorised for further investment into a variety of schemes and 
projects which have also resulted in failure to generate a return for the 
Company. 
However, as a result of the dramatic falls in property values and disposals at 
unprofitable levels in conjunction with lengthy delays and the inability to 
continue to service the debt, Bank Leumi, who were the principal lender to 
Windmill Developments Ltd the owners of the Development at Ham Yard, 
re-possessed the property along with other supporting properties giving rise to 
a Receivership notice being posted at Companies House .  Upon initial enquiries 
the Company had been informed by Companies House to desist from supplying them 
with information which had apparently become the responsibility of the 
'Receiver' 
The Ham Yard property was subsequently sold by Messrs Allsops, as LPA Receivers, 
for a figure which was insufficient to discharge Bank Leumi's loans and 
accumulated interest, consequently the Company was unable to recover loans made 
to the property's owner Windmill Developments Ltd which has since been 
liquidated. 
There being no other assets available in the Company, the daily operating 
expense of OEM Plc has been personally supported by the Chairman whilst all of 
these matters were being resolved. 
In making the arrangements for a CVA the Directors have been able to ensure that 
the creditors of the company derive some comfort from a proposal to clear all or 
part of their debts, whilst also restoring the status quo with Companies House 
and HM Revenue & Customs, who at this stage are not owed any payments, but 
equally have not had the opportunity to examine Company accounts and therefore 
raise any questions and satisfy themselves of that situation.  The Directors 
have also endeavoured to keep the London Stock Exchange Authority up to date 
with information leading to a way forward for the Company. 
It is the intention of the Directors to continue to seek out opportunities that 
may exist to preserve the fully quoted status of the Company and by completing 
these current processes hopefully deliver a satisfactory return to the 
Shareholders, whose extended patience has been fully appreciated by the 
Directors, in the fullness of time. 
 
Chairman 
OEM Plc 
. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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