LCF Administrator Update 1st March 2019

The update below has been reported as a summary of a phone call with Finbarr O'Connell of Smith & Williamson, administrators of London Capital & Finance on 1st March 2019. We have no independent verification that this is an accurate summary of the call and this information has not yet been published on the LCF website.

So far Finbarr and the team have found loan agreements to borrowers and sub-borrowers covering £236m and also total bondholder creditors of £236m. When the loans were taken out, each borrower agreed to pay back their loan to include the agency fee. Although the fee was never directly invested in the borrowers companies they do still have an obligation to us to repay it.

The substantial risk to us as bondholders lies in the borrowers commercial ability for them to repay us. Its this that is the primary focus at the moment. The Administrators are working hard to understand the security on these loans and the risk of non-payment.

Most borrowers are cooperating with the Administrators. However, one particular borrower has put up considerable resistance to opening its books up on the basis of a transaction it is currently engaged with. This party is insisting that the company will be repaid and quickly, it is still a cause for concern.

In regard to emails sent to the Administrators. They are receiving high volume of emails on a daily basis and where they receive common questions they will be adding them to the next version of FAQ's. If this is the case you may not get a personal reply. Important to note that each time an email to them is dealt with by the Administrators there will be a charge to the estate so please keep that communication for important matters such as change of address. This is the same for calls to the call centre.

Many have expressed concern over the company structure and recent charges. These matters are all being closely monitored by the Administrators’ staff and all necessary actions are being taken. Whilst we fully understand it does not look good it still does not mean the loan agreements and security are not in place. There are no borrower loans that are expected to be repaid imminently and the Administrators have not received any interest payments from the loans.

There are two streams working in parallel, one on asset tracing and one working with key stakeholders like FCA, HMRC etc. This ensures the right focus is placed by appropriate team.

The Administrators have not sent any postal letters only communication via email. If you have not received an email please check your junk folder before contacting the office on 0800 046 7006. Alternatively, go to the London Capital & Finance website for the latest update.

With regard to our position with the FSCS the company was only FCA regulated with regard to how the mini-bonds were promoted and we will still need to each prove our individual case. The Administrators’ team are working on building our case with the FSCS.

In order to help them do this can anyone please forward any personalised sales emails you received to londoncapital@smithandwilliamson.com The Administrators have received a number of emails offering support and representation on application process. People who have volunteered will be contacted as soon as the meetings are established.

He did say that we are now ready to start thinking about a formal creditors’ committee. This will be comprised of around 5 bondholders and will be constituted in a few weeks time when the Administrators’ Proposals are issued to the bondholders.