THE members of the Four Seasons Country Club in the Algarve, Portugal, have agreed at an extraordinary general meeting to waive two tax indemnities provided by McInerney Properties. This should now pave the way for its restructuring.
In return for waiving the indemnities McInerney has agreed to pay the club £300,000 cash plus a further £300,000 in new McInerney shares, as part of the restructuring. The committee members of the club agreed to the deal last month but it had to be approved by the 3,000 members at an extraordinary general meeting. That meeting took place on yesterday evening and around 150 members attended. Acceptances were received in respect of around 90 per cent of the 1,000 votes (including proxies) cast.
Provided the conditional agreement with the new investors is cleared, the members would now end up with a small shareholding, probably under 5 per cent, in a new holding company which would be created as part of the restructuring. The group is now in a position to finalise its conditional agreement with new equity investors.
The refinancing involves an injection of £5 million in new equity and the conversion of some debt into equity. The group is understood to have received commitments for more than £5.5 million, with a major Irish based institution putting up most of this.
Around £2.5 million of the injection will be used to pay off the secured loan stock held by Standard Life, Irish Life, the McInerney family and management. The plan involves the conversion of these funds into new equity.
The group now intends to circulate its annual report and a circular to shareholders, giving details of the restructuring, "as soon as possible". McInerney shareholders will then have to approve the deal at an extraordinary general meeting, scheduled for October.
The group yesterday stressed that the proposals will entail a "very substantial dilution in ownership by existing ordinary shareholders" but they "will restore the group's balance sheet". The shareholders will receive only a nominal amount of equity which will be much less than the present market price of 4.5p. However, sanction of the deal will be essential for the group to survive as it has a negative net worth of some £9 million.
