Breathing space for Connaught after it secures £15m overdraft
SOCIAL HOUSING maintenance firm Connaught soothed investors yesterday with the news it has secured an additional £15m overdraft facility and delayed repayments on other loans.
The company said earlier this week it was in urgent need of funds to avoid breaching banking covenants.
Connaught said it will continue negotiations with banks to secure long-term financing. Its lenders, led by RBS, did not respond to requests for comment yesterday.
Sir Roy Gardner, the firm’s chairman, said: “We are delighted by this tangible evidence of support from our lenders. We will now seek to put in place arrangements which will leave Connaught on a more secure footing for the longer term.”
The firm is today expected to receive the results of an independent enquiry into its accounting policy, conducted by Deloitte. It requested the investigation after a profit warning wiped more than 90 per cent off the firm’s share value in a month.
The FSA has also made an informal request for information on the firm’s disclosure of its financial problems to the stock market.
Shares closed up 13 per cent at 35.1p yesterday.