Heron bondholders urge 'yes' vote

REPRESENTATIVES of bondholders in Heron, Gerald Ronson's embattled property to petrol pumps group, went public for the first time yesterday in urging a 'yes' vote to a proposed pounds 1.3bn restructuring of the company, which if it fails will result in one of the UK's biggest bankruptcies.

Philip Seers, a director of Phoenix Securities, a corporate finance house which advises Heron bondholder groups, said he would be telling the pounds 110m worth of investors he represents to vote for the deal. Heron's bondholders, who represent a total debt of pounds 450m, have to vote by 28 June. To go through the plan needs to be approved by at least 75 per cent by value.

Mr Seers rejected yesterday's call by the London bond dealer Gary Klesch that bondholders should reject the reconstruction proposals, which have already been approved by all 83 of Heron's banks. He also rejected Mr Klesch's claim that putting Heron into liquidation might well be preferable for bondholders and that the planned property sell-off would be better off without Mr Ronson at the helm.

Mr Seers said: 'If these plans are not approved there is a huge risk of uncertainty about Heron. Bondholders would be considerably worse off in an insolvency. The bondholders we advise believe that Mr Ronson is the right person to head the disposal programme.'

Mr Klesch, who claims to represent nearly 60 Heron bondholders with total holdings of pounds 45m, sent his report to all 12,000 bondholders yesterday, urging a 'no' vote to the rescue deal. He attacked the pounds 50m spent on advisers to the reconstruction and called for the the sacking of Mr Ronson, the chief executive, who stands to collect pounds 5m over five years under the rescue package.

The attack drew an angry reply from the company and privately from several of the creditor banks and from Heron's own City advisers.