Chairman of troubled social housing specialist ’delighted by tangible evidence of support from lenders’

Connaught has agreed an additional £15m overdraft as it attempts to fix its cash woes.

The troubled social housing specialist, which had a turnover of £660m last year, warned last Friday that it would break its banking covenants. Its share price immediately dropped by 80% and it entered talks with its lenders.

The new borrowing arrangement is for the short term and will include deferral of interest and principal payments on its existing overdraft during July and August. It is in addition to its current £200.6m overdraft.

Sir Roy Gardner, chairman of Connaught 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.”

Connaught will continue negotiations with its lenders in the coming weeks to further restructure its finances.