Statement re Investment in Fastrack Group PLC
RNS Number:7021X
Jacobs Holdings PLC
23 January 2001
JACOBS HOLDINGS PLC (‘JACOBS’)
Investment in Fastrack Group PLC
Today Fastrack Group PLC (‘Fastrack’), a parcels and freight forwarding
business, announced the appointment of a receiver.
Following the sale of the businesses of Ontime Logistics and Ontime
International to Fastrack on the 24 November 2000 Jacobs has held a 34%
shareholding in Fastrack. Jacobs also entered into a ‘Put and Call Option’ for
further Fastrack shares and a bank guarantee to HSBC Bank Plc (‘HSBC’), to
support the overdraft facility of Fastrack for a sum of up to #2.0 million.
The guarantee is only callable to the extent that a debenture held by HSBC
over the assets of Fastrack is insufficient to cover the total indebtedness of
Fastrack to HSBC.
On 22 December, 2000 Fastrack called in the put option of #1.0 million from
each of Jacobs and Goldpower Limited (the nominee shareholder for the Bulldog
Funds) issuing a further 12,903,226 shares to each of Jacobs and Goldpower
Limited, taking the Jacobs stake in Fastrack to 35.5%.
Jacobs is not obliged to provide any further financial support to Fastrack nor
do the directors of Jacobs intend to do so. The Board of Jacobs believes that
it is prudent to assume that its in investment in Fastrack has no further
value and accordingly Jacobs intends toprovide fully for this investment as
at 31 December 2000.
The amount of the provision, inclusive of the ‘put’ option monies but
excluding any eventual liability under the HSBC bank guarantee, will amount to
approximately #6.5 million largely represented by goodwill. An estimate of any
eventual liability under the guarantee to HSBC Bank is not yet available, but
will also be fully provided as at31 December 2000.
Jacobs believes that it is too early to assess whether any eventual recovery
from its investment in Fastrack will be forthcoming.
The Jacobs group, excluding the logistics business, is expected to achieve a
profit before exceptional items and interest, for the year to 31 December,
2000. The result overall for 2000 will show a substantial loss primarily
arising from the trading losses incurred by Ontime Logistics prior to sale and
the provisions referred to above.
The quantum of the losses incurred by Ontime Logistics were the deciding
factor in the Board’s decision to sell the businesses and effectively to
contain future exposure. Jacobs is expecting to return to an improved level of
profitability in 2001 with its core businesses within the Automotive and
Shipping divisions all currently trading satisfactorily.
23 January 2001
ENQUIRIES:
Jacobs Holdings Plc Tel: 020 7408 0123
Paul Pascan, Finance Director
College Hill Tel: 020 7457 2020
Gareth David email: [email protected]
END
