47UI Sigma Fin.1.00%

    RNS Number : 5697J
  Sigma Finance Corporation
  04 December 2008
   

    For Immediate Release
    4 December 2008
    COMPANY ANNOUNCEMENT
SIGMA FINANCE CORPORATION (IN RECEIVERSHIP)
    The receivers of Sigma Finance Corporation (In Receivership) (the "Company"), being A. R. Bloom, M. E. Mills and S. J. Harris each of
Ernst & Young LLP (the "Receivers") have today made the following announcement.
    Capitalised terms used and not otherwise defined herein have the meanings given to them in the Amended and Restated Security Trust Deed
dated 27 March 2003 (the "Security Trust Deed").
    Court Application
    The Receivers applied to the English High Court for directions regarding the meaning of the closing words of clause 7.6 of the Security
Trust Deed. Four secured creditors, whose liabilities fell due at different times, were joined as parties to the proceedings and argued
their respective positions in relation to the meaning of the clause, while the Receivers took a neutral stance. The parties' identities were
not known to the Court or to each other, and they were identified as Party A, Party B, Party C and Party D. The hearing took place on 4
November 2008 under conditions of privacy (due to the price sensitive information that was being discussed). The Court handed down its
judgment on 7 November 2008, and ordered that the judgment remain private. The Court has directed today that the privacy order be lifted.
    High Court Judgment
    The High Court found that, on the true construction of clause 7.6 of the Security Trust Deed, the Receivers were obliged during the
Realisation Period to realise the Assets as necessary and for the best price available in order to discharge Short Term Liabilities: (a) due
and payable as at 6 October 2008, on 6 October 2008; and (b) falling due for payment during the said period on the due dates therefor. The
Court ordered that the Receivers were obliged to: 
    *     realise the Assets forthwith, for the best price available; and 
    *     subject to the costs and expenses of the Receivers and the Security Trustee incurred in and about the exercise of their powers
under the Security Trust Deed, apply the Assets and/or proceeds of realisation thereof to discharge in full (a) first, all Short Term
Liabilities due and payable as at 6 October 2008 and; (b) next, each Short Term Liability falling due for payment after 6 October 2008 in
the order in which they fell due, 
    until the Assets and/or proceeds of realisation are exhausted (the "Order"). The Order was stayed until the conclusion of any appeal or
further order of the Court.
    Court of Appeal Judgment
    The High Court's decision was appealed by Party B, Party C and Party D (the "Appeals") and the expedited Appeals were heard by the Court
of Appeal in private on 20 November 2008. The Court of Appeal handed down its judgment on 25 November 2008 and ordered that the judgment
remain private until otherwise directed by the Court. The Court of Appeal directed today that the privacy order in relation to the judgment
be lifted. The Court of Appeal ordered that the Appeals be dismissed, and stayed the operation of the second limb of the Order (requiring
the Receivers to apply the Assets and/or proceeds of realisation thereof to discharge the Short Term Liabilities) until the conclusion of
any appeal to the House of Lords. Party B, Party C and Party D have filed petitions for leave to appeal to the House of Lords.  
    Auction
    Upon receiving the judgment of the Court of Appeal, in accordance with the first limb of the Order which was not stayed, the Receivers
held an auction sale of debt securities held by the Company (other than those securities issued by Sigma Finance, Inc., the Company's
subsidiary) (the "Portfolio") on 2 December 2008 involving certain market counterparties (the "Bidders"). The Company received firm bids for
the debt securities from nine Bidders, the highest combination of which in aggregate valued the Portfolio at approximately US$306 million
(the "Highest Bid Prices"). The Company acting by the Receivers has accepted the Highest Bid Prices and notified the successful Bidders of
such acceptance. Settlement of the sale is expected to take place on 9 December 2008.
    Estimated Outcome
    The Receivers have previously estimated that the Company's Secured Obligations are approximately US$6.2 billion, of which approximately
US$1.6 billion fell due for payment either before or during the Realisation Period. The Short Term Liabilities which fell due for payment
either before or during the Realisation Period will materially exceed the Company's assets in the form of funds realised by the auction and
other cash available to the Receivers. The Receivers are currently calculating the quantum and the precise order in which the Company's
Short Term Liabilities fell due for payment in the Realisation Period. While this order has not yet been settled or verified by the
Receivers, the Receivers' current estimate is that (provided the judgments are not overturned by the House of Lords) Short Term Liabilities
which fell due for payment after 23 October 2008 will not be met either in full or in part out of these assets. This will also be the case
for Short Term Liabilities which fell due for payment after the end of the Realisation Period and Long Term Liabilities. Short Term Liabilities which fell due for payment on 23 October 2008 are
currently estimated to be paid in part only.
    The Receivers act as agents of the Company at all times and without personal liability.

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