Engineer to delist from the stock exchange as part of restructuring plans
Consulting engineer Mouchel has announced a major financial restructuring that will see its lenders swap unpaid loans for a major stake in the company.
The announcement, made to the stock exchange today, comes in advance of a 30 August deadline at which it was set to default on the terms of its existing loans.
The debt for equity swap will see Mouchel’s bankers – RBS, Lloyds Banking Group and Barclays – write off £87m debt in return for a “majority” stake in the company. The deal, designed to save the 8,000-strong company, comes at the expense of existing shareholders, who will receive just 1p per ordinary share.
Mouchel will be delisted from the stock exchange as part of the restructuring.
Mouchel closed at 2.30p last night, and have this morning fallen by more than 50%, to be trading at just above the 1p level.
The deal leaves Mouchel with £60m, a level which it said was “appropriate for a company of Mouchel’s size and prospects.”
The firm added that the restructuring would help trading performance, which it said was being hampered by speculation over its financial situation. It said: “Though the underlying business is performing broadly in line with management expectations, performance in the current year continues to be impacted by the financial uncertainty surrounding the group and associated costs involved in the operational restructuring of the business.”
Grant Rumbles, Mouchel chief executive, said: “Given the circumstances, we believe the restructuring represents the best possible outcome for all of our stakeholders, safeguarding our existing customer and supplier contracts and preserving job security for Mouchel’s employees.”