IT IS IMPORTANTANT TO NOTE:
This paper and it’s corresponding 10 answers were submitted to the FSA, who have reviewed, confirmed and agreed publication of it by the ARMSG 29/11/2011
“We think it is now the time for all of us to start focusing on the immediate future.
Until such time as we have the Full Insetco Proposal in our hands to view and the subsequent vote which will follow, it would be far more constructive if we reflect on what information we have to date, and what information is either missing or not clear, and what additional pertinent questions we need to ask and get answers to.
We also feel we need to keep the questions and the answers as simple as possible.
Many investors have become confused reading comments full of conjecture posing as the truth, but based on nothing more than ill informed opinions.
In the interests of clarity we have set down the 10 most asked questions and the corresponding answers we have reasonable confidence in knowing to be correct.”
Q1: Will I get all the money back that I have invested?
A1: The agreement sets out that if 100% of investors (bondholders and pending investors) accept the Insetco offer they will receive the equivalent value of perpetual bonds from Insetco that they held / intended to hold in ARM. If only a proportion of investors accept the Insetco deal then this will be reduced proportionately.
It is the intention of Insetco that at some undetermined point in the future the value of the bonds issued will be redeemed in full. However, it should be highlighted that this will depend on the success of Insetco going forward.
Q2: Will I be paid a coupon at the previous rate?
A2: No. Insetco are proposing to only pay 7.5% on their bonds.
Q3: Does that mean I will be worse off?
A3: In relation to coupons initially yes. However, it is the intention of Insetco that when your bond is redeemed the difference between what you would have earned in interest from ARM will be repaid on redemption. Again this will depend on the success of Insetco going forward.
In relation to original capital then this depends on the number of investors accepting the Insetco offer (see questions 5 below). The agreement outlines that investors will also receive shares, which depending on the success of Insetco could make up any shortfall in your original capital.
Q4: What happens if a proportion of bondholders chose to remain in ARM?
A4: If a proportion of Pending Investors and Bondholders wish to remain with ARM, the relevant proportion of pending investor’s cash and income from the portfolio will be paid to ARM. If ARM’s appeal to the CSSF is unsuccessful, following the full appeal process, ultimately a Luxembourg court will place the firm in liquidation. If this happens the liquidator will determine how to wind up ARM’s business and distribute its assets to investors.
Q5: How will it effect my situation with some bondholders remaining in ARM?
A5: The overall situation will be decided proportionately on the value of the bonds either remaining in ARM or being transferred to Insetco. To clarify; the least value remaining in ARM will increase proportionately the value to those who wish to take up the Insetco Offer.
Q6: What if I decide to stay with ARM, what will the outcome be?
A6: If you stay with ARM and ARM’s appeal to the CSSF is unsuccessful, then following the full appeal process, ultimately a Luxembourg court will place the firm in liquidation. If this happens the liquidator will determine how to wind up ARM’s business and distribute its assets to investors. We are unable at this stage to provide further details on this.
Q7: Do you think a liquidator would be able to make some sort of coupon payment especially on compassionate grounds?
A7: Only the appointed liquidator will be qualified to make those decisions.
Q8: Is it possible to know the total fees that will come out of the liquidation process?
Q9: Do you suggest a way in which the fees could be determined?
A9: It is suggested that you look at past, current and ongoing cases as an example where liquidation has taken or is taking place, to better judge the possible outcome of your current situation. “(Information researched and noted.)”
Q10: If I accept the Insetco offer and were to die, what happens to my money?
A10: If you accept the Insetco deal, Insetco have confirmed that either:
- Your estate will continue to receive income at 7.5% until Insetco redeem bond. Or,
- · Your estate can seek redemption of the bond at a mark to market price, which may be less than the nominal amount of the bond.
“We have come this far because of the efforts all four of us have put in by way of various forms of influence since our initial meeting on the 18th October 2011. We all agreed the aim was to find out, as much factual information as was possible, thereby giving individual investors, the opportunity to decide which is the best option for them.
We hopefully will now have the opportunity over the next few weeks to explore those choices, which this site will facilitate, in an effort to ensure all investors have enough factual information to make a reasonable decision regarding their own particular circumstances.”