SHAREHOLDERS in Regus yesterday faced a 12 per cent dilution of their holdings, as the serviced office provider fought its way out of Chapter 11 bankruptcy protection in America.

Regus, which in January became the first UK-listed company to file for Chapter 11, announced that it had agreed a three-pronged restructuring plan with its creditors.

As a result, the company will emerge from American bankruptcy protection in October, three months earlier than expected. Regus’s American arm had been blighted by badly timed over-expansion.

The announcement came as Regus reported a half-year pre-tax loss of £19.3 million, reduced from a £22.4 million loss last time.

Mark Dixon, chief executive, was upbeat. He said that Regus needed just a moderate increase in revenue to move back into profitability.

Under the restructuring plan, creditors will swap their debt of $41.5 million (£26 million) for shares in either a new London-listed holding company or, if the new company does not go ahead, in Regus itself at 35p each. The swap would dilute the investments of existing Regus shareholders by between 9 and 12 per cent.

Regus will pay a further $6 million cash immediately and $1.2 million over the next six years to its preferred creditors. The officer provider, which operates in 51 countries, has also negotiated new leases with 95 per cent of its landlords and creditors.

Mr Dixon said that he was confident that the Surrey-based company had overcome the worst of its troubles. He said that new orders increased by 8 per cent in the second quarter of 2003 and that the company had almost £50 million in cash.

Mr Dixon said: “In the last six months, we’ve signed £30 million worth of new deals with Starbucks, Kodak and IBM. Companies are looking at property portfolio outsourcing as a way of lowering their costs and gaining flexibility as economic times harden.”