QHI Quartrly.Hit

RNS Number:2941Z
Quarterly High Income Trust PLC
30 July 2002


COMPANY ANNOUNCEMENT                         30 JULY 2002


The Quarterly High Income Trust PLC (Registered Number 2691478)

The Chairman announced in his statement on 29 April 2002 that as a result of
falling asset values the Company was in breach of the financial covenants in the
loan facility with its banks as a consequence of which, with assistance from its
advisors, a long term restructuring of the loan facility with the banks was
being negotiated.

The banks have been supportive during this difficult time and negotiations were
close to completion when the market value of the Company's investment portfolio
suffered a substantial further fall alongside the collapse in the FTSE 100 index
during July 2002. The Company's Assets, valued on a mid market basis as at 29
July 2002 are significantly less than its liabilities by a ratio of 0.806:1

The proposed restructuring with the banks was dependent inter alia upon the
agreement of an acceptable asset to loan ratio. The fall in the market value of
the Company's investment portfolio and the continuing uncertainty regarding the
value of the portfolio and volatility of the market have caused the Company and
the banks to accept that at this juncture, a full restructuring of the loan
facility cannot be achieved.

On 26 July 2002 the Company was able to agree amendments to the terms of the
existing loan facility with its bank for a 12 month period during which time the
key provisions to apply will include the following:


  * An immediate prepayment of #50 million of the facility out of the
    Company's cash resources;

  * No payment of dividends by the Company (as a result of the fall in assets,
    the provisions of the Companies Act 1985 prohibit payments of dividends in
    any event);

  * Waiver of all reported breaches and suspension of all events of default
    and financial covenants;

  * Execution and delivery of a floating charge;

The facility will be repayable upon demand and all cash generated by the Company
after the payment of expenses, will be used to repay the loan on a quarterly
basis.

It is the intention of the banks and the Company to try and agree a longer term
restructuring solution against a more stable market environment in 12 months
time or earlier should conditions permit.

Documentation is being prepared by the banks' advisors and the board anticipates
these arrangements being formalised within 14 days. Based on the current
outlook, the Board believes that returns to shareholders, if any, are minimal.
In the light of the make-up of the Company's portfolio and the price of its
shares, the Directors and the Company's Manager do not feel it appropriate to
proceed to liquidation of the Company at this time.

For enquiries:

Morley Fund Management Ltd
Neil Smith                                                         020 7809 6151

                      This information is provided by RNS
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