This morning’s IMS from Helphire offers up 2 positive comments –
Firstly, the reduction in net debt of almost £8m in the last quarter is encouraging, particularly with the companies equity being valued currently at less than £5m.
Secondly, following the legal proceedings by industry peer Accident Exchange against insurer Autofocus, these actions being brought about through a large number of cases that were said to have been wrongly decided in the insurers favour due to alleged fraud by Autofocus’ employees, Helphire themselves are now looking to recover potential sums against certain insurers.
Documents have been requested from the liquidator by Helphire in relation to their potential claims against the insurance industry and it is not surprising that RBS (parent company of Direct Line – one of the principal potential counterparts in the event of legal proceedings by Helphire) has lodged an objection to Helphire’s application – the sums potential recoverable could run to tens of millions. The court hearing is scheduled for Jun 2012 and shareholders should watch this closely. What is encouraging is that a number of insurers have expressed that they wish to “enter into dialogue” with the Group – usually code for settlement discussions.
Given the destruction of shareholder value presided over by many of the current Board of Directors of Helphire, certain shareholders have expressed a desire for management change. We will watch this evolving story with interest.