Fresh problems for SQN as Snoozebox appoints administrators – SQN Asset Finance Income has made the following announcement:
“SQN Asset Finance Income Fund Limited (the “Company” or “SQN”), the leading diversified equipment leasing fund listed in the UK, notes the announcement (RNS Number: 9145V) by Snoozebox Holdings plc (“Snoozebox”) regarding discussions concerning its debt repayment obligations and long-term capital structure.
This is consistent with the restructuring plans, as previously announced to the Company’s shareholders, to ensure the longevity of the core assets and a full amortisation of capital with payment of interest to SQN. Following discussions with multiple interested parties, the Board of SQN can confirm it is in the final stages of negotiations regarding the repositioning of Snoozebox’s core assets.
The Board look forward to providing a further update on these discussions in due course.”
Snoozebox said yesterday that: “The Directors have made significant progress toward improving the trading prospects and viability of the Company since adopting a new strategy in mid-2016. Most recently, on 24 August 2017, the Company announced a significant contract win and the Directors believe the Company retains a good pipeline of potential new business for delivery going into 2018. The Company has made good progress toward achieving operating cash flow breakeven, through a combination of revenue increases and cost reductions.
As previously announced, the Company has been in discussion with its primary lender, SQN Asset Finance Income Fund Limited (“SQN”), concerning its debt repayment obligations and the longer-term capital structure of the Company. Achieving a successful outcome to these discussions has been fundamental to the continuance of the Company as a going concern for some time.
Despite constructive discussions and a number of proposals being made, it is now the Directors’ view that the Company and SQN will be unable to agree a suitable debt servicing plan or longer-term capital structure for the Company and without SQN’s support the Directors have concluded that the Company is unable to continue as a going concern. The Company’s main trading subsidiary Snoozebox Limited (the “Subsidiary”) would, in the absence of support from SQN, be unable to pay its liabilities as they fall due. The Company, by virtue of its guarantee of the Subsidiary’s debt service obligations, would then in turn also be unable to pay its liabilities as they fall due.
The Directors have concluded that in the circumstances it is in the best interests of stakeholders as a whole that the Company and Subsidiary be placed into administration.”
Snoozebox provided temporary accommodation, mainly for events. It had a contract in the Falkalnd Islands, providing a temporary home for oil workers, but when this came to an end, the business struggled to replace the lost revenue.
SQN / ZZZ : Fresh problems for SQN as Snoozebox appoints administrators