Hume Capital Securities PLC Statement Re: Financial Position and Client Assets (3386H)

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RNS Number : 3386H

Hume Capital Securities PLC

12 March 2015

12 March 2015

Hume Capital Securities plc ("Hume" or the "Company")

Statement Re: Financial Position and Client Assets

Financial Position of the Company

The Board of Hume Capital Securities plc ("Hume" or the "Company") requested suspension of trading in its shares at 7.30 a.m. on 11 March 2015 pending clarification of its financial position. With effect from 8.00 a.m. on 12 March 2015 Hume's membership of the London Stock Exchange was suspended.

In the last annual accounts it was stated that a further significant equity capital injection into the Company would be required in 2015. Substantial cost savings have been made in the business since last June, when the planning for the refinancing began. It has, however, become apparent that the legacy losses and costs of the business are too high and the current revenue generation of the business too low to resolve the capital shortfall to the satisfaction of our regulators without a capital injection at a level which is a significant multiple of that which was envisaged last June.

Whilst the pipeline of potential new business across all divisions is now looking stronger than it has for some time, the timing of potential revenue receipts is nevertheless too far out or too uncertain to tide the business over in the short term. The Board has therefore reluctantly concluded, after consulting with the cornerstone investors and debt providers who have supported the business to date, that an underwritten fundraising at a level likely to provide the requisite capital and satisfy the Company's primary regulator for its authorised business is not commercially viable.

The Board appointed insolvency practitioners Leonard Curtis and legal advisors DWF LLP to explore options for the continuation of the business but has reluctantly had to conclude that the only option open to the Company is to appoint administrators.

As the Company falls within the ambit of The Investment Bank Special Administration Regulations 2011 ("SAR"), we intend to apply to the court for the appointment of administrators under the SAR regime, which is expected to take place within the next few days. A further announcement will be made following any appointment of a Special Administrator.

The SAR regime has as its objectives, inter alia, the return of client assets as soon as is reasonably practicable and to rescue the Company as a going concern or to wind it up in the best interests of the creditors.

The SAR dictates the timing and manner in which client assets will be dealt with - which is a matter beyond the control of Hume or its Board.

As a consequence, of the above and after discussions with the regulator, Hume has applied for a requirement ("Requirement") which the FCA has imposed on it under section 55L(5) of the Financial Services and Markets Act 2000.

Without the FCA's express prior written consent, Hume must not:

-- carry on business that involves the carrying on of a regulated activity, except where necessary to settle any existing contracts to which it is a party;

-- initiate any further business, including accepting a new client or a new order for an existing client;

In addition, the Hume must not deal with or release client money unless it is:

-- receiving client money into its client bank accounts in compliance with the Client Assets Sourcebook in the FCA Handbook ("CASS"); or

-- otherwise dealing with or releasing client money with the FCA's express prior written consent.

Hume must not in any way dispose of or deal with any of its assets without the FCA's prior written consent.

Client Assets

The Board of Hume continues to oversee the custody of client assets in accordance with the CASS requirements of the FCA Handbook. Hume will act in accordance with the FCA's expectation to ensure appropriate protection and fair treatment of customers.

As a result of the Requirement, the Company is unable to release to clients any funds at this time without the FCA's consent in order to ensure that all customers are treated equally and in an orderly fashion.

Should clients have any queries we have a dedicated telephone number for that purpose. Please do not hesitate to call 01282 610 638.

Enquiries:

Hume Capital Securities plc

Guy Peters (Chief Executive Officer) 020 3693 1492

Grant Thornton UK LLP, Nominated Adviser

Philip Secrett /Melanie Frean/ Jamie Barklem 020 7383 5100

This information is provided by RNS

The company news service from the London Stock Exchange

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