Dawson International PLC

RNS Number : 2613I

Leeds Group PLC

23 July 2012

 

Leeds Group plc (the "Company" or "Leeds")

Statement re:- Dawson International PLC

The board of Leeds Group plc notes the announcements made by Dawson International PLC ("Dawson") on 20 July 2012.  Leeds owns approximately 29 per cent. of the issued share capital of Dawson.  The audited report and accounts of Leeds (as at 31 May 2011) recorded the cost and carrying value of its holding in Dawson at £981,000.

Following the announcement that the Dawson board has failed to reach agreement with the Pension Protection Fund ("PPF") and the Pensions Regulator ("tPR") to seek a negotiated entry of its UK defined benefit pension plans, the value of Leed's investment in Dawsons is uncertain.  Dawson's board has stated that it will issue an update as soon as it has further information.  The Leeds board will review any new information and update shareholders as appropriate.

Following Dawson's announcement, Jan Holmstrom, who is a director of Leeds, resigned from the board of Dawsons.  Mr Holmstom strongly disagreed with the decision of the PPF and tPR to reject the Dawson board's proposals believing that these offered a significantly better outcome for PPF than what eventually an insolvency will give in a likely administration process.

Leeds Group has been working closely with Dawson in their attempt to reach a compromise with PPF and tPR by offering to guarantee a proposed fundraising amongst existing shareholders.  According to Leeds Group's understanding, the Trustees incurred significant expense in relation to the process which, as it now looks, has no benefit to Dawson or the plans beneficiaries.  Leeds Group has difficulty to agree to PPF reasoning that the plans deficit were too large compared to what Dawson offered in the compromise.  Firstly it is not Dawson who has caused the deficit as that is managed by Trustees supervised by tPR with really no influence by the Company and secondly, we cannot see the rational whereby PPF turn down an offer which will clearly give more than insolvency value and in addition will not put a lot of jobs at risk.  The board of Leeds Group cannot see the rationale behind the PFF reasoning as it is very likely that UK tax payers now have to pick up a larger bill than otherwise would have been the case.

The board of Leeds Group is also concerned that other companies in a similar situation will be treated in the same way and thereby denying them to continue to develop their business for the future.

A further update will be made in due course.

Leeds plans to issue its preliminary statement on or around 31 July 2012.

Enquiries
Leeds Group plc
Kathryn Davenport	0113 285 4324
Cairn Financial Advisers LLP
Tony Rawlinson / Avi Robinson	020 7148 7900

 

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