Davenham reacts to surprise share price rise

DISTRESSED asset finance firm Davenham has reiterated its view that there is not likely to be any value left in its shares once debts to its lenders are paid off.

The firm’s board issued a statement yesterday following an unexpected rise in its share price, which has climbed from less than a penny to 4.5p due to a spate of share purchases.

Davenham is essentially winding up its affairs following a strategic review concluded earlier this year by advisor Hawkpoint Partners which indicated that the company was unlikely to realise any value for shareholders once its outstanding loans were collected and its debts to its bank, RBS, were paid off.

The company announced on June 30 that it was to cease new lending and collect its remaining loans (which stood at £144.2m at the end of 2009) in a “prudent and orderly manner”.

Davenham also attempted to delist its shares in a bid to save money, but was refused permission to do so by its shareholders.

A statement issued by the board yesterday said: “The Board continues to consider that there is likely to be no value for ordinary shareholders in the company (and to confirm that the Board is not aware of any developments in relation to the company, or in relation to its financial position or prospects, which would cause the Board to reconsider that view).”