Mouchel shareholders upset the apple-cart

Trading in the shares of Mouchel Group has been suspended after shareholders voted against the company's restructuring plan.The financially troubled outsourcing firm announced restructuring proposals at the beginning of August which would see shareholders getting just a penny for each of their shares after the firm agreed a debt-for-equity swap with its lenders.Mouchel said when it announced its restructuring plans that it estimated that it would have until the end of the month before it would be in breach of the covenants on its existing lending facilities, which would then require the immediate repayment of those facilities with money which Mouchel does not have.Now that the shareholders have kyboshed the restructuring idea, Mouchel is holding urgent talks with its lenders, pension trustees and the pensions regulator about where to go from here. Once the terms of plan B have been finalised, the board intends to call in the administrators to safeguard the businesses within the Mouchel group, as well as protect the interests of the group's employees, customers and suppliers. Mouchel's expectation is that the administrators will immediately sell the company's assets to a newly incorporated company, somewhat in the manner of double-glazing companies since time immemorial. This newly incorporated company will be owned by affiliates of the company's existing lenders, namely Royal Bank of Scotland, Lloyds Banking Group and Barclays, and management.Plan B should see employees, customers and suppliers kept sweet but existing shareholders, the statement pointedly notes, will receive nothing for their shareholdings. JH