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London Scottish says it is still in sale talks

5:50 pm, July 11, 2008
London Scottish Bank seeks OK to sell subsidiary

By Claire Shoesmith

Struggling Manchester-based lender London Scottish Bank has called a general meeting for July 30 to seek shareholder approval for the proposed disposal of its invoice discounting and factoring subsidiary LSIF.

In a statement to the stock exchange, London Scottish (LSE: LSB) said resolutions will also be proposed to approve revised remuneration arrangements for the company’s executive directors and the adoption of new articles of association, which will remove the current borrowing limits. As a result, the bank said its gearing levels are expected to increase.

“Whilst these increases in gearing need to remain compliant with gearing ratio limits imposed by the new facility agreement entered into on May 28, they may exceed the borrowing limits imposed by the current articles,” the company said. “Accordingly, the board consider the removal of the current upper limit on borrowing to be in the best interests of the company.”

London Scottish in June announced plans to sell LSIF to Hitachi Capital for as much as £28.5m and use the proceeds to reduce its net borrowings.

Comments? cshoesmith@crain.com