Weatherly International Plc Regulatory News (WTI)

31 July 2018

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

Weatherly International plc (AIM:WTI)

("Weatherly" or the "Company")

Publication of Administrators' Statement of Proposals and Change of Registered Office

Further to the Company's announcement on 1 June 2018 detailing the appointment of Administrators, Weatherly announces that the Administrators' Statement of Proposals can be found at the following website:

https://www.fticonsulting-emea.com/cip/weatherly-international-plc

Pursuant to Paragraph 49(6) of Schedule B1 of the Insolvency Act 1986 (as amended), should you wish to receive a copy of the Statement of Proposals free of charge, please write to the Company's registered office at: Weatherly International plc, C/O FTI Consulting LLP, 200 Aldersgate St, London EC1A 4HD.

The key conclusions of the Administrators' Statement of Proposals are set out below:

"Secured creditors

At the date of appointment, the Secured Lenders were owed approximately $126m by the Group. WTI is a guarantor of this debt. The Secured Lenders hold security dated 7 May 2015 over the Group. As a result, the Secured Lenders have security over all of the Groups assets, which includes fixed and floating charges.

The return to the Secured Lenders is currently uncertain.

Preferential creditors

Under the Act the main classes of preferential creditor are employees in respect of certain claims in relation to arrears of wages, holiday and pensions contributions.

The Administrators have paid retained staff their wages to the date of their redundancy. Consequently, there are not anticipated to be any arrears of wages claims. However, it is anticipated that there may be claims in respect of accrued but untaken holiday pay.

We are currently awaiting confirmation from the RPS of the level of preferential claims against the Company. We currently envisage that there will be no funds available to make a distribution to preferential creditors.

Unsecured creditors

Unsecured creditors rank behind both secured and preferential creditors. Under Section 176A of the Act where after 15 September 2003 the Company has granted a creditor a floating charge, a proportion of the net property of the company achieved from floating charge asset realisations must be made available for the unsecured creditors ("the Prescribed Part").

There are unlikely to be sufficient funds to repay the Secured Creditors, therefore returns to unsecured creditors would only potentially come from the Prescribed Part, up to a maximum of £600k.

We currently have insufficient information to estimate the likely size of the Prescribed Part and the return to unsecured creditors, given that calculation is subject to the total level of floating charge realisations, the costs of realisations and the cost of paying preferential creditors, all of which remain uncertain.

However, given the information that we have to date it is unlikely that there will be a dividend to unsecured creditors.

Shareholders

As it is unlikely that there will be sufficient assets to repay the Company's creditors in full it is highly unlikely that there will be any return or distribution to shareholders.

Administrators' proposals

The main purpose of the Administration is statutory objective b, achieving a better outcome for each of the Company's creditors as a whole than would be possible if the Company were wound up without first being in Administration.

The Administrators are seeking a decision from the creditors to approve the proposals using the deemed consent procedure. 

If a creditor agrees with the proposed decision to approve the proposals, then they do not need to do anything. Unless 10% of creditors, who would be entitled to vote at a qualifying decision procedure, object to the decision to approve the proposals they will automatically be approved on 8 August 2018.

If a creditor wishes to object to the decision, send notice of objection so that it is received by no later than 23.59 hours on 8 August 2018. If a creditor has not already submitted proof of their debt, they should complete a proof of debt form. Objections by a creditor will not count unless they have lodged a proof of debt by no later than 23.59 on 8 August 2018.

It is the Administrators' responsibility to determine whether any objections received are sufficient for this Deemed Consent Procedure to end without a decision being made. If sufficient objections are received, then the administrator will write to creditors to seek approval for this decision using a qualifying decision process.

In order to provide clarity to creditors on the further specific areas for which the Administrators are seeking approval in their Proposals specific proposals are set out below, which apply to the Company.

Proposed Strategy, Actions and Activities

The Administrators will continue to manage the affairs of the Company in order to achieve the purpose of the Administration.

The Administrators will be authorised to:

· Do all such other things and generally exercise all of their powers as contained in Schedules B1 and 1 of the Act, as the Administrators consider desirable or expedient to achieve the statutory purpose of the Administration.

· Investigate and as appropriate pursue any claims the Company may have.

· Agree the claims of the secured, preferential and unsecured creditors against the Company unless they conclude, in our reasonable opinion, that the Company will have no assets available for distribution.

· Distribute funds to the secured, preferential creditors and unsecured creditors as and when claims are agreed and funds and circumstances permit.

Creditors Committee

Creditors have been invited to determine whether to form a Creditors' Committee. To enable the creditors to make an informed decision as to whether they wish to either seek to form a Committee, or to nominate themselves to serve on a Committee, further information about of the role of the Committee and what might be expected from its members has been prepared by R3 has been made available to creditors.

In the event the creditors of the Company so determine, a creditors committee be appointed comprising of not more than five and not less than three creditors.

Proposed Exit Routes

The most likely exit route for the Company is moving to dissolution after the completion of its Administration.

Once all assets have been realised, and if there are no funds available to enable a distribution to the unsecured creditors (other than the Prescribed Part) and a liquidation process is not required, the Administrators shall file a notice pursuant to Paragraph 84 of Schedule B1 to the Act together with their final progress report at Court and with the Registrar of Companies for the dissolution of that company.

In the event that the Administrators believe liquidation to be the most appropriate route for a company, for example if there are onerous assets that need to be disclaimed, or there are matters that require further investigation, we will exit the Administration of that company by a compulsory liquidation. The Administrators give notice that on such a petition the Joint Administrators will seek their appointment as liquidators pursuant to Section 140 of the Act, with any liquidator being able to undertake acts required or authorised under any enactment individually. The creditors are entitled to nominate a different person as the proposed liquidator, provided that the nomination is made after the receipt of these proposals and before the proposals are approved.

Discharge of Administrators

The Administrators will be discharged from liability in accordance with Paragraph 98(1) of Schedule B1 of the Act immediately upon our appointment as Administrators ceasing to have effect.

Administrators' Remuneration

The creditors committee, if one is appointed, will be asked to agree that the basis of the Administrators' remuneration be fixed by reference to the time properly given by the Administrators' and their staff in attending to matters arising in the Administration, calculated at the prevailing standard hourly charge out rates used by FTI at the time when the work is performed, plus VAT, and be asked to agree any category 2 expenses.

If a creditors' committee is not appointed, the Secured Lender (and preferential creditors if applicable) of the relevant company shall be asked to fix the basis of the Administrators' remuneration in accordance with Rule 18.18 of the Rules, to be fixed by reference to the time properly given by the Administrators' and their staff in attending to matters arising in the Administration, calculated at the prevailing standard hourly charge out rates used by FTI at the time when the work is performed, plus VAT."

Any other enquiries regarding the Company or its administration should be directed to WTIshareholders@fticonsulting.com.

In addition, the Company confirms that it has changed its registered office to C/O FTI Consulting LLP, 200 Aldersgate St, London, EC1A 4HD.

Additional Statutory Information Pursuant to Rule 3.37 of the Insolvency (England and Wales) Rules 2016

Registered Office: C/O FTI Consulting LLP, 200 Aldersgate St, London, EC1A 4HD

Court Reference: CR-2018-4537

Court High Court of Justice, Business and Property Courts of England and Wales Insolvency and Companies List (ChD)

Further announcements will be made as required.

For further information please contact:

FTI Consulting LLP +44 (0) 20 3727 1418

(Administrators)

Simon Kirkhope / Andrew Johnson

Strand Hanson Limited +44 (0) 20 7409 3494

(Nominated Adviser & Broker) 

Rory Murphy / James Dance / Jack Botros