WTC Westcity

    RNS Number : 9808V
  Westcity PLC
  04 June 2008
   

    WESTCITY PLC ("the Company")

    LOAN FACILITY FROM CHAPMAN INTERNATIONAL


    As shareholders were advised in the Chairman's Statement in the Company's interim report dated 18 September 2007, the Company entered
into a � /EUR hedging contract in June 2007 to limit its currency exposure in relation to its investment in the Stonehage Westcity Property
Fund ("Fund"), which is Euro-denominated. With the subsequent strengthening of the Euro against Sterling, the value of the Company's
investment in the Fund in Sterling terms has increased. However, a corresponding foreign exchange loss has resulted from the hedging
transaction. As at 3 June 2008, this amounted to approximately �3 million. This hedging contract matures on 9 June 2008, when the foreign
exchange loss at that date will become payable in cash.

    The Directors recognise that it is fundamental to ensure that the Company at all times has sufficient cash reserved for working capital.
As a result of this imminent cash outflow and in the interests of prudence, the Company has secured a loan facility from Chapman
International Investment Ltd ("Chapman"), the Company's largest shareholder, on the following terms. The loan facility is for �2 million
available over a 2 year period. The annual interest rate is 2.5% over the Sterling LIBOR rate ruling from time to time. An arrangement fee
of �20,000 is payable to Chapman. The Company will grant Chapman a charge over 5 million units in the Fund, as security for the loan. The
loan is repayable at the end of the 2 year period.

    This facility will only be drawn down to the extent that the Directors consider that the Company's remaining cash resources for working
capital are insufficient.

    Having made a number of enquires from other potential lenders for similar facilities, the Directors of the Company consider the terms of
the loan from Chapman to be competitive and commercial.

    The directors of the Company, other than Messrs Ira Rapp and Michael Rapp, who have an indirect interest in Chapman, having consulted
with KBC Peel Hunt, the Company's nominated adviser, consider the terms of the loan from Chapman to be fair and reasonable in so far as the
Company's shareholders are concerned.

    4 June 2008

    Enquiries: 

 Westcity PLC                                     020 7424 6711
  Michael Tannenbaum, Finance Director  

 KBC Peel Hunt  (Nominated Adviser and Broker)    020 7418 8900
 Jonathan Marren
 Oliver Stratton



This information is provided by RNS
The company news service from the London Stock Exchange
 
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