UPDATE 2-Accident Exchange shareholders face dilution; shrs tank

* Nears deal with Morgan Stanley to amend credit facility

* Talks on restructuring of convertible notes advancing

* Plans to delist shares from LSE

* Shares plunge 67 pct to all-time low
(Adds details, analyst comments; updates share movement)

Sept 1 (BestGrowthStock) – Accident Exchange Group Plc’s (ACEX.L: )
shareholders will face significant dilution as the vehicle
replacement firm nears a refinancing deal with its senior
lender and plans a conversion of its unsecured notes.

The cash-strapped company said it planned to cancel its
shares from the Official List and delist them from the London
Stock Exchange to effect the refinancing.

Accident Exchange shares, which had traded as high as 495
pence about four years ago, were down 65 percent at 3.63 pence
at 1102 GMT. It had a market capitalisation of 7.3 million
pounds at Tuesday’s close.

The company, which provides courtesy vehicles after
crashes, said talks with Morgan Stanley to amend its existing
40 million pounds credit facility continued to progress and
that they had reached an agreement in principle.

Any formal amendment to the facility was conditional upon
conversion of the company’s 50 million pounds convertible notes
due 2013, Accident Exchange said in a statement.

The company also said discussions to restructure its
convertible notes were advancing, with a majority of note
holders supporting a complete conversion.

It expects significantly amended terms to the current
conversion price of 75.4 pence, which would dilute the existing
shareholders.

A conversion of the notes would remove any obligation to
repay the 63.3 million pounds otherwise due in January 2013, it
said.

The company delayed reporting results for fiscal 2010,
saying it could not finalise accounts until the refinancing.

“The postponement of results means there are likely to be
concerns in the market over a further deterioration in trading
performance,” said analyst Danielle James of Shore Capital.

In March, Accident Exchange had said future compliance with
its banking covenants required ongoing flexibility from its
principal banker and that it had not been operating profitably
during the four months ended Feb. 28. [ID:nSGE62I09F]
(Reporting by Tresa Sherin Morera in Bangalore; Editing by
Aradhana Aravindan)

UPDATE 2-Accident Exchange shareholders face dilution; shrs tank