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<p><strong>From:</strong> Nicholas Curtis &lt;n.curtis123@btinternet.com&gt;<br />
<strong>Sent:</strong> 07 September 2020 15:18<br />
<strong>To:</strong> Shane Gallwey &lt;shane.gallwey@guinnessfunds.com&gt;<br />
<strong>Cc:</strong> Bridget Hallahane &lt;Bridget.Hallahane@guinnessfunds.com&gt;; John Soden &lt;soden.j@gmail.com&gt;; nurse_stephen@hotmail.com; Stephen Phillips &lt;Stephen.Phillips@templebright.com&gt;<br />
<strong>Subject:</strong> Re: KPH</p>

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<p>Dear Shane</p>

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<p>Thanks for your email of Friday. &nbsp;You asked where equity could come from for the KPH?</p>

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<p>I understand there is no chance of further equity from GAM. &nbsp;The ability to get equity from the existing Harcourt shareholders ( and I use the term loosely across all the 6 PubCos) depends on how quickly the current shareholders realise that their equity has been all but wiped out ( and as a shareholder in the KPH - I include myself in this)!</p>

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<p>I enclose the table below to illustrate how bad the situation is in the KPH relative to the other pubs. &nbsp;Not only is there only a 2.2% margin above the current valuation but the Downing debt is at a quantum where it will be unlikely to be refinanced by equity. &nbsp; &nbsp;</p>

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<p>In all the other pubs we can at least have a shot at trying to pay back the debt and giving new money a first charge over the assets - to get them to participate. &nbsp; Shareholders will be comparing their investments across the other pubs and where to put the new money.</p>

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<p>I appreciate that you think the Savills valuation is not a fair reflection of the assets worth, which may be true. &nbsp; &nbsp;The interest bill, however, on the &pound;4m of debt will be c. &pound;350k p.a. and it is hard to see trading profit covering this cost. &nbsp;Any new money coming into the business will be speculative and need control of the asset. &nbsp; The existing shareholders may at best be able to negotiate some upside in the event of a substantial turn around and keep the asset trading to claim EIS.</p>

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<p>Kr Nick</p>

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<p><img src="data:image/png;base64,[encoded data, 17200 characters]" style="height:222px; width:713px" /></p>

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<p>On 4 Sep 2020, at 09:16, Shane Gallwey &lt;<a href="mailto:shane.gallwey@guinnessfunds.com">shane.gallwey@guinnessfunds.com</a>&gt; wrote:</p>

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<p>Dear Nick,<br />
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Thank you for your email.<br />
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We will not propose you as a director of Barts Pub, and I understand your reasoning. &nbsp;<br />
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Regarding the funding solution - I do agree that more equity would be preferable to increasing the debt - do you have any suggestions on where that could come from?<br />
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We will continue to liaise with you on progress.<br />
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Best wishes<br />
<br />
Shane<br />
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