Connaught gets deferral, £15 million short-term facility from lenders

By Angela McDaniels

Tacoma, Wash., July 29 - Connaught plc's lenders agreed to extend a £15 million short-term overdraft facility to the company and defer interest and principal payments due on its existing £200.6 million facilities in July and August, according to a company news release.

The overdraft facility is available immediately.

As previously reported, the company said on Monday that it was negotiating with its lenders about an "urgent requirement" for more funds that was partly caused by additional pressure from suppliers and sub-contractors.

In addition, the company concluded that its net debt will be significantly greater than the previously advised level of £120 million at the end of its fiscal year on Aug. 31 and that it will breach its banking covenants.

In Thursday's release, Connaught said it will continue negotiations with its lenders in order to secure a long-term restructuring of its financing.

The company also continues to review its trading performance and the implications this may have on its full-year financial performance.

Connaught provides environmental, social housing, public sector and compliance services and is based in Exeter, England.

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