Shareholders at listed engineering group provide £2m financing to bolster working capital

Shareholders at listed engineering group provide £2m financing to bolster working capital

Listed engineering group Redhall Group has agreed £2m short-term financing facilities with two shareholders to fund ” unusually high, short term working capital balances.”

The Wakefield-headquartered group this morning announced that it had agreed terms with major shareholders Lombard Odier Investment Management and client funds managed by Downing LLP.

Redhall Group said: “The Shareholder Facilities will be utilised to fund unusually high, short term working capital balances, which are being driven principally by two of the Company’s major contracts. The board of Redhall considers that the Shareholder Facilities are the most appropriate method of providing this temporary additional working capital.”

An additional £1m working capital facility has been made available to the company by each of LOIM and Downing for a period of eight months. Each of the Shareholder Facilities is repayable in full by 1 October 2019, along with an exit fee equal to 12.5% of the Shareholder Facility.

The Shareholder Facilities are subordinated to the company’s existing facilities with HSBC. HSBC has given its permission for the Company to enter into the Shareholder Facilities and has entered into an inter-creditor agreement with each of LOIM, Downing and the Company. The Company expects to redeem the Shareholder Facilities from cash flow.

Martyn Everett, Redhall’s Chairman, said: “The Board is grateful for the continued support of LOIM, Downing and HSBC, believing it signifies their confidence in the Company’s ongoing prospects.

“Market conditions remain encouraging in the majority of the Company’s core sectors and we see a strong pipeline of opportunities.”