Fri, 03 May 2013 | ADMINISTRATION
Rumours have continued to circulate around Superglass and whether or not the business will enter administration.
The company warned earlier this month that an administration was possible if shareholders didn't back a multi-million pound financial restructure for the business. The company's share value fell by over 60 per cent when the plans for the deal were first announced.
An agreement has been reached in principle to refinance the £12 million debt the firm owes to Clydesdale Bank, but it is yet to be approved by investors. The deal, which includes a clause that would entitle the bank to half of Superglass's annual post-tax profits, would see the company undertake a new shares placing with the aim of raising at least £12.2 million.
However, the move would bring about a number of changes. First of all, the company's listing on the London Stock Exchange would be cancelled, with its shares to be traded on the alternative AIM market instead.
There is still some hope that the deal will go through and if it does, the Stirling-based company has said that the strength of its balance sheet will be “transformed”. But if anything blocks the go-ahead then the company admitted that the likely outcome is administration or another form of insolvency.
John Colley, non-executive chairman with Superglass, commented: “With the strong support of the Clydesdale Bank and investors we remain confident of completing thisâ¨transformational refinancing which will provide Superglass with a considerably strengthened and sustainable long term capital structure.
“The proposed refinancing will leave the company very well placed to benefit from any resurgence in market volumes and the efficiencies from its recent capital investment programme.”
The company has been struggling with “extremely challenging” trading conditions for some months now. Its losses before taxation stood at £1.6 million for the first six months of the year to February 2013; this is around double the figure recorded in 2012.
But there is some optimism on the horizon with the business expecting a gradual increase in UK housebuilding activity from next year as the Government's schemes should finally start to come to fruition.
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