R&Q careens towards default as asset sale drags on, mulls liquidation

R&Q Holdings has been pushed up against the wall as it struggles to sell a key asset in its ongoing restructuring and has begun consideration of an alternative route through liquidation that could ultimately leave its own shareholders empty handed, management has admitted.

Talks to sell R&Q's programme management business in order to rescue the group and satisfy encroaching lenders have dragged on since an October 2023 preliminary sales deal with Onex were first penned. R&Q was forced to strike a stand-still deal with creditors in late April.

Rescue efforts have brought “significant additional unexpected costs and expenses” while binding R&Q's hands on its rump legacy business to render a “material impact on the Company's stability as a business and as a going concern”.

Would-be buyer Onex has now filed an alternative proposal should the original deal fall through on account of the difficulties. That plan would involve provisional liquidation of the parent company in Bermuda and completion of the sale via that process. Remaining R&Q assets would also likely be sold off.

“In such circumstances there would be very little, if any, chance of any value accruing to the Company's shareholders,” R&Q management warned.

Debt holders could also be left out in the cold. Without cash for deleveraging from the originally planned deal, R&Q will default, management added.

“The Board is currently exploring and evaluating all options that may be available to the Company, including alternative transactions (including the Alternative Proposal) and potential sources of liquidity, whilst continuing to work to complete the original Sale,” management said.

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