23 Dec 2011 13:16
Announcement
23 December 2011
Oak Holdings plc (the "Company")
Trading and strategic update and update on suspension
Oak shares were suspended from trading on AIM on 21 October 2011 as a result of the financial uncertainty caused by the sudden and unexpected termination by Rotherham Metropolitan Borough Council of the Company's contract to manage the Rother Valley Country Park ("RVCP") which was Oak's primary source of revenue.
Since then, the Oak Board has reviewed the contract to manage RVCP and has taken legal advice with a view to ascertaining whether it may be entitled to compensation from Rotherham Metropolitan Borough Council in respect of contractual and other matters arising from the early termination of the contract. The precise amount of the claim is not yet certain and, accordingly, there is no certainty as to the outcome.
Oak is currently generating insufficient working capital and has insufficient available resources to meet its existing and ongoing liabilities and has therefore sought assistance from third parties. In November and to date in December, the Company and its subsidiaries have drawn a series of small secured loans from a group of lenders led by Yorke & Hartford Limited ("Y&H") which total £36,135. Other lenders include Mr Uday Nayak and companies associated with him. This lending group has previously lent the Oak Group a net aggregate of £208,606 (excluding accrued interest) which remains outstanding. On 8 November 2011 Oak Heritage Limited, which owns a refurbished Hispano Suiza motor vehicle and one in the course of refurbishment together with a valuable stock of spare parts, granted an all monies debenture over its assets and undertaking in favour of Y&H on behalf of the lending group in respect of certain loans. On 21 November 2011 Oak granted a similar debenture over its assets and undertaking (subject to certain previously granted debentures) in favour of Y&H on behalf of the lending group securing all of the loans. The loans have interest rates of, generally, 7% per annum or 11% per annum and have various short maturities and negotiations are under way to extend these. Further loans may be sought from the lending group, but there is no commitment by the lending group to provide any further funds.
Concurrently, the Board is exploring opportunities to stabilise the Company and to provide the Company with a new strategic direction including the acquisition of additional business interests. Two potential such opportunities are currently under consideration although neither is yet at a sufficiently advanced stage to provide shareholders with details, nor is there any certainty that either proposal will proceed. The Board will continue to seek a basis on which these opportunities can be progressed.
Whilst the financial position of the Company remains unstable and its future uncertain, the Company's shares will remain suspended from trading on AIM. Shareholders will be kept informed of any further developments.
Enquiries
Oak Holdings plc
Michael Woodcock
Chairman
Tel: 020 7493 5522
Nominated Adviser to Oak Holdings plc
Cairn Financial Advisers LLP
Tony Rawlinson
Tel: 020 7148 7900