2nd Oct 2013 06:54
LONDON (Alliance News) - Albemarle & Bond Holdings PLC Wednesday said it is in talks with its lenders about solving potential breaches of its debt covenants later this year after discussions with its largest shareholder about an equity raising failed.
The pawnbroking and jewellery business Monday said the fall in gold prices this year had created uncertainty over its prospects and meant it could breach covenants on its debt agreements before the end of this year.
It has been in talks with its biggest shareholder, EZCORP International, Inc., to try and get support for a GBP35 million equity raising and to negotiate a revised banking package, but Wednesday said those talks, which had been going on for four months, had failed.
It has now signed terms on a deferral of its debt covenant tests with lenders from the end of September to the end of October while it talks with those lenders about a possible solution. The deferral agreement means it has to accept the appointment of a Chief Restructuring Officer to the board by October 10.
The company had net debt of about GBP51 million as of September 30. Under the terms of the deferral, it has had its lending facility cut to GBP53.5 million from GBP65 million, meaning it has no funds left to draw down.
"Further updates on these discussions will be made as soon as is appropriate and the timetable for announcing the company's final results for its financial year ended 30 June 2013 will be delayed whilst these discussions are underway," Albemarle & Bond said in a statement.
By Steve McGrath; [email protected]; @SteveMcGrath1
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