For immediate release: 0700hrs 8 January 2009
Syndicate Asset Management Plc
("Syndicate", the "Company" or the "Group")
Statement re: Repayment of Loan Notes and Deferred Considerations, Funds Under
Management, and Settlement of Employee Claims
The Directors of Syndicate Asset Management plc (AIM:SAM) are pleased to
announce that it has agreed and made a series of repayments on loans and loan
notes totalling approximately £9.4 million. As a result of these repayments,
the business will achieve total savings of approximately £1.45 million,
comprising capital repayment and accrued interest of approximately £0.7 million
and future interest payment savings of approximately £0.75 million. Following
these repayments, Syndicate's unaudited free cash position (excluding cash
relating to regulatory capital) is currently approximately £2.5 million.
In addition, the final deferred payment relating to the acquisition of Pagan
Osborne is now expected to be in the region of £0.4 million, a further saving
to the Group of £0.2 million. Syndicate now has no debt except for the above £
0.4 million and two further scheduled deferred consideration payments which
total an aggregate maximum of approximately £0.9 million and which are due for
repayment during 2010.
Repayment of Loan Notes, Deferred Considerations and Loans
Syndicate is pleased to announce that it has now agreed, and made, an early
repayment covering all the outstanding loan notes and accrued interest that
relate to Syndicate's acquisition of EPIC. The acquisition loan notes had a
face value of £6.9 million and were due to be repaid in March and December
2011. In addition, a separate payment of £0.4 million relating to accrued
interest on the loan notes was due to be paid on 31 December 2009, with further
interest of £0.4 million and £0.25 million to be paid in 2010 and 2011
respectively.
Under the agreement reached with all the loan note holders, a one-off repayment
totalling £6.6 million in respect of the repayment of principal and all accrued
and further interest has been made resulting in a total saving of this early
repayment to Syndicate of approximately £1.35 million, equivalent to 17% of the
liability.
Syndicate is additionally pleased to inform shareholders that it has also
repaid in full the Royal Bank of Scotland plc's outstanding loan of £2 million.
The Company has likewise repaid in full the outstanding Lombard facility of
approximately £0.5 million. Both of these facilities were detailed in the
Prospectus which was published on 12 October 2009.
Syndicate also announces that the final deferred payment relating to the
acquisition of Pagan Osborne, is now expected to be in the region of £0.4
million. The maximum payment outstanding was £0.6 million and, therefore the
actual payment to be made is expected to represent a further saving to the
Group of approximately £0.2 million.
As a result of these repayments of the Group now has no other debt except for
the deferred consideration payments that remain to be paid by Syndicate
relating to the acquisition of Pagan Osborne plus two further payments relating
the acquisitions of Burfield and Partners Asset Management Limited and
Independent Financial Solutions Group Limited. The aggregate maximum of the
deferred consideration for these two acquisitions is approximately £0.9 million
and both are subject to performance conditions. The final payments on both
these acquisitions are due during the course of 2010. Syndicate's unaudited
free cash position (excluding cash relating to regulatory capital) is
approximately £2.5 million.
Funds Under Management
Separately, the Directors of Syndicate announce that as of 31 December 2009
total funds under management within its institutional and wealth management
divisions stood at approximately £5.8 billion (30 September 2009: £6.4
billion).
Within Syndicate's private client wealth management businesses of Ashcourt
Rowan and Savoy, funds under management for the quarter remained flat at £3.4
billion (30 September 2009: £3.4 billion).
Meanwhile, funds under management within Syndicate's institutional fund
management business, EPIC, stood at approximately £2.4 billion at 31 December
2009 (30 September 2009: £3.1 billion). This December figure takes into account
the now confirmed £651 million withdrawal of low margin business by Epic's
largest client which was referred to in Syndicate's interim accounts statement
of 4 December 2009.
The Directors are pleased to report that revenues for the period up to 31
December 2009 remain in line with current market forecasts.
Settlement of Employee Claims
The Prospectus published by Syndicate on 12 October 2009 also provided summary
information regarding two employment tribunal claims by former directors of
Rowan and two employment tribunal claims by former directors of Savoy.
Syndicate has now agreed to compromise arrangements covering three of these
claims where the total aggregate compensation paid has been £65,000 compared to
the aggregate schedule of loss submitted totalling approximately £286,000 plus
a further uncapped amount relating to an alleged protected disclosure and
breach of contract. Syndicate intends to defend rigorously the one remaining
claim and expects that the employment tribunal will be held in the next few
months.
Jonathan Freeman, Group Chief Executive Officer, commented:
"We are pleased to have been able to further strengthen the balance sheet
through these steps and likewise remove a series of potential liabilities. We
look forward to continuing to streamline our operations and improve
efficiencies within the Group so that we can continue to benefit from the
improved market conditions."
-Ends-
Further information:
Syndicate Asset Management plc
Jonathan Freeman (Group CEO) Tel: 020 7659 8060
Cenkos Securities plc
Stephen Keys/Julian Morse Tel: 020 7397 8900
GTH Communications
Toby Hall/Christian Pickel Tel: 020 7153 8039