14th Oct 2013 09:56
LONDON (Alliance News) - Alpha Pyrenees Trust Ltd Monday said it has terminated the currency hedges that the trust's chartered accountants once warned could threaten the ability of the trust to continue as a going concern.
Alpha Pyrenees shares were Monday quoted at 4.01 pence, down 1.24 pence, or 23.6%, one of the biggest fallers on the London market.
Alpha Pyrenees, the French property investor, said it had reached a settlement with Barclays Bank PLC, the counterparty over the currency hedges, which had been set to expire on Wednesday.
The settlement value, after applying collateral held by Barclays, is EUR24.7 million.
The fair value of the currency hedge liability, net of collateral, was EUR25.5 million on June 30. The trust had used currency derivatives to hedge its planned net invested equity, with EUR163.1 million hedged under derivatives in 2006 and 2007 and priced at market rates at that time.
The settlement was reached on Friday.
Alpha Pyrenees said it has agreed to settle the liability with Barclays on October 25 and in the meantime the two parties are in advanced discussions in relation to financing the settlement.
In the trust's August 16 half year report, its chartered accountants BDO Limited had warned that failing to settle the currency swap derivatives "may cast doubt about the group's ability to continue as a going concern".
By Samuel Agini; [email protected]; @samuelagini
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