Housebuilder's shares are suspended after refinancing talks collapse
The future of housebuilder Oakdene has been thrown into serious doubt after its lenders demanded repayment of its estimated debt of £85m after refinancing talks collapsed.
Trading in Its shares have been temporarily suspended on the Alternative Investment Market pending an announcement on its financial status.
In a statement to the City it said: “On 30 September 2008, the company announced at its interim results that it was in breach of its covenants with its lenders and was relying on a temporary facility, but that discussions were ongoing with its lenders around its future banking terms.
Since this date discussions have continued with the company's lenders. Unfortunately, the company has not been able to agree terms with its lenders and they have served notice on the company to repay the outstanding facilities.
Accordingly, the company has requested a suspension of trading in its shares on AIM pending clarification of its financial position.
A further announcement will be made as appropriate.”
The future of the company was called into question in October last year after it became the first listed housebuilder to breach its banking covenants.
The breach followed the firm’s £6.4m loss in the first six months of 2008 and the admission that the company had failed to raise £5m from a share placement.
Auditor UHY Hacker Young said at the time: “This [covenant breach] indicates the existence of a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern.”
On 30 June 2008, Oakdene had net debt of about £85m and is currently relying on a temporary deal with its lenders.
Chief executive Carl Turpin assured investors a refinancing plan would be put in place quickly but there has been no news in three months.
More to follow.