RSM Tenon group has appointed administrators and has suspended its shares following an announcement this morning that a takeover deal by Baker Tilly has fallen through.
Lloyds Banking group has pulled its financing facilities for the firm, meaning that RSM Tenon "does not expect to continue to be able to meet its liabilities as they fall due".
RSM Tenon's board had therefore concluded that the appointment of administrators was "the most appropriate course of action".
Three insolvency practitioners at Deloitte have therefore been appointed as joint administrators to RSM Tenon this morning.
RSM Tenon Limited and the other principal trading entities continue to trade as normal and are not affected by this, the company said.
Immediately following their appointment, the joint administrators agreed a sale of the RSM Tenon's trading entities to Baker Tilly. The sale is expected to complete within two weeks, following regulatory and shareholder approval.
RSM Tenon announced on 16 August that it was likely that, as a consequence of the company's high debt level, if an offer was made by Baker Tilly, minimal value, if any, would be attributed to the issued share capital of the company.
The sale agreed by the joint administrators will realise no value for the ordinary shares of the company.
At 31 December 2012, the RSM Tenon had net borrowings of £80.4m. The terms of the sale agreement mean that Lloyds will not recover its secured debt in full.
RSM Tenon's trading entities have not entered into insolvency proceedings and will continue to trade as normal. As a result no employees, clients or suppliers - other than Lloyds - are expected to be materially affected.
The company's ordinary shares have been suspended from trading with immediate effect.
It is expected that, the joint administrators, on behalf of the company, will request the UK Listing Authority to cancel the company's ordinary shares of 1p each from admission to the Official List of the UK Listing Authority.
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