Manx Financial Regulatory News (MFX)

13 Nov 2008 16:38



13th November 2008 

Conister Financial Group plc

("CFG" or the "Company")

On 29 September 2008, the Company announced that it had agreed to dispose of 51% of its pre-paid card subsidiary, TransSend Holdings Ltd ("TransSend"), by way of 10% to Altair Financial Services International Plc ("Altair") and 41% to Equity Special Situations Limited ("ESS"), the latter having a minority shareholding in Altair.

Following the suspension of ESS on 15 October 2008, the Company notes the announcement made by ESS on 7 November 2008, concerning their financial position which includes the following paragraph:

"Should ESS fail to reach agreement with its creditors and debt providers and/or fail to raise the necessary funds from the sale of certain assets, it is likely that the Directors will be forced to take steps to seek formal protection from the Company's creditors."

The Company is in the process of reviewing the implications as regards the TransSend disposal. Given the circumstances, it is not now possible to progress the operational milestones (including the granting of an FSA e-money licence to TransSend) within the stipulated six months of the agreement. 

The Company, as a result of other transactions announced earlier this year, holds 4,248,795 ordinary shares in ESS representing 18.6% of their issued share capital. Given the announcement by ESS, the Board of CFG is therefore considering the value of the ESS holding, acquired by a share-for-share exchange with a minimal cash top-up, and whether any diminution in value needs to be determined in consultation with the Company's Auditors.

The shares held in ESS do not form part of CFG's banking operation subsidiary's regulatory capital. Conister Trust Ltd, the bank, remains separately and well capitalised with a Tier 1 capital asset ratio of 19.3% which compares very favourably against the average of UK banks of 5.5%.

The Company will make a further announcement when it has determined the appropriate course of action, which may include legal redress if appropriate, and also the opportunity to potentially reverse the share-swap transactions, in relation to the above matters.