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Debt for equity swap likely as Accident Exchange's loan deadline nears

Claims management and dealer services group Accident Exchange looks set to have to delist from the London Stock Exchange in order to manage some of its debts.

The group announced today that it has reached an agreement in principle with its main lender, Morgan Stanley, over restructuring a £40m loan which is due to be called in at the end of this month.

However the agreement, which defers payment until July 2013, rests on Accident Exchange giving shares in the business as a conversion for the £50.5m of convertible loan notes it has out with institutional investors.

The likely result is that, as less than 25% of its shares will be in public hands, under stock market rules the group will have to delist and become a private company.

In a statement, the group, which is headed by chief executive Steve Evans, said: “The board believes that a conversion of the convertible notes is in the best interest of the company as it will materially de-gear the balance sheet of the company by removing any obligation of the company to repay the £63.3 million otherwise due in January 2013 and will also remove the ongoing annual cash interest costs of £2.75 million to the company.”
 

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