AEA Technology Group PLC Suspension from trading (6287Q)

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RNS Number : 6287Q

AEA Technology Group PLC

08 November 2012

AEA TECHNOLOGY GROUP PLC ("AEA", the "Company" or the "Group")

Suspension from trading and intention to appoint administrators

On 18(th) July 2012, the Company announced that, despite constructive discussions with Lloyds Banking Group (the "Bank") and the trustee of the Group's defined benefit pension scheme (the "Trustee"), the Board had been unable to achieve a long term solution to the existing levels of net debt and the significant on-going funding costs of the Group's retirement benefit obligations. As a result, with the support of the Trustee and the Bank, including short term financial support, the Board announced it would consider all strategic options to realise value. In addition, the Board announced that it did not envisage there would be offers for the share capital of the Company and that the Board expected that such strategic options would result in little or no value for shareholders.

The Company re-confirmed this position on 1(st) August 2012, being the date of the annual financial results statement for the year ended 31(st) March 2012, and confirmed that the process of considering such strategic options was underway including on-going discussions with a number of interested parties. As part of that announcement, the Company announced that the Bank would continue to provide short term support while the Group executed its financial restructuring plan and had agreed in principle to provide additional short term funding of GBP5 million on a secured basis through to the end of October 2012. In addition, the Company announced that the Trustee had agreed to defer all pension payments otherwise due to assist the Group maintain appropriate liquidity whilst all strategic options were being considered.

On 6(th) August 2012, the Company announced that it had duly entered into a facility agreement with the Bank for the additional short term funding of GBP5 million through to the end of October 2012 highlighted in the announcement of 1(st) August 2012. At that time, the Company re-confirmed that the process of considering such strategic options was continuing, including on-going discussions with a number of interested parties, and that the Board remained of the view that it expected that such strategic options would result in little or no value for shareholders. The Board's view in this regard was subsequently reconfirmed in the interim management statement announced by the Company on 17(th) August 2012.

On 19(th) September 2012, being the date of the Company's annual general meeting, the Company announced that the additional short term funding secured in August 2012 was allowing the Board to continue to consider all strategic options to realise value and that it was having on-going and constructive discussions with a number of interested parties. Notwithstanding this on-going process and related discussions, the Board highlighted that the Company's situation remained such that the existing level of the Group's net debt and the level of retirement benefit obligations were considerably greater than the likely value of the Group's business as a whole and that therefore, the Board remained of the view that such options would result in little or no value for shareholders.

On 30(th) October 2012, the Company announced that the Board remained in on-going and constructive discussions with number of interested parties and that, given this, the Bank remained supportive of the Company while it considers all strategic options. Notwithstanding this, as previously announced, the Board remained of the view that such strategic options would result in little or no value for shareholders.

Since 30(th) October, the Board and its advisers have continued its discussions with a number of interested parties as part of its consideration of all available strategic options to realise value. All indicative proposals received have only contemplated the sale of the underlying businesses and assets of the Group. Furthermore, based on the final offers received for the Group's businesses and as anticipated in Company announcements since 18(th) July 2012, the Board now expects that no value will be attributable to the Company's ordinary shares.

The Board and boards of the relevant Group subsidiary companies, in assessing the status and nature of the discussions with interested parties, have now concluded that such discussions and related proposals do not offer the realistic prospect of a solvent solution for the Group's financial position and therefore will require an administration process to be effected. Therefore it is expected that the Board and the directors of the relevant Group subsidiary companies incorporated in England and Wales will commence the process to appoint administrators to the Company and the relevant Group subsidiary companies incorporated in England and Wales later today and it is expected that, once appointed, the administrators will finalise the sale of certain businesses and assets of the Group as soon as possible.

It is proposed that Angus Martin and Philip Bowers of Deloitte LLP will be appointed as joint administrators of the Company, and that William Wright and Mark Orton of KPMG LLP will be appointed as joint administrators of the relevant Group subsidiary companies incorporated in England and Wales. The Board believes that the appointment of the administrators, to conclude the sales process started by the Board, is likely to protect the vast majority of jobs and contracts across the Group.

Accordingly, the Company considers itself to be unable to assess its current and future financial position and so has requested that the listing of its ordinary shares on the Main Market of London Stock Exchange be suspended from trading with effect from 7:30am today. It is expected that, once appointed, the joint administrators, on behalf of the Company, will request that the UK Listing Authority cancel the admission of the Company's ordinary shares to the Official List of the UK Listing Authority as soon as possible.

The Board also wishes to emphasise that there is no intention to initiate any form of insolvency process in respect of the Group's US-based businesses, Eastern Research Group Inc and Project Performance Corporation, which continue to trade normally.

The Company understands that the Trustee intends to issue an update statement to members of the pension scheme in the next few days.

The Company will provide a further update in due course.

For further information:

 
 AEA Technology Group plc             0870 190 8137 
 Dr Paul Golby, Chairman 
 John Lowry, Interim CEO 
 Kevin Higginson, Finance Director 
 
 IR Focus                             020 7593 4015 
 Neville Harris

This information is provided by RNS

The company news service from the London Stock Exchange

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