£31.3m loan will allow Jarvis to operate until a debt for equity swap is secured in August.
Jarvis has secured a £31.3m loan from Deutsche Bank to tie the company over until it raises £297m in a debt for equity swap.
The Deutsche loan is made up of a £22.7m revolving credit facility and a £8.7m standby term loan facility. On completion of the debt for equity exchange Jarvis will raise £50m from a new share issue, which will repay £22.7m of the Deutsche loan.
Existing shareholders will receive only 5% of the new shares. Jarvis has offered shareholders who do not wish to take up the offer 25p for every £1 of share equity.
The restructuring is expected to be completed by the end of August 2005.
Chief executive Alan Lovell said: "I am pleased to announce the new Deutsche Bank facility and the important progress we have made towards our goal of restructuring Jarvis's balance sheet and substantially reducing its debt level."
Jarvis said that trading in core markets in the second half of the year to March 31 2005 remained challenging. It said that trading in the rail, road and plant businesses were weaker than the first half of the year. The Group net debt rose to £305m during the period.
The disposal of its European Road Business will be completed by June 2005 according to Jarvis. The sale of shares in Prosign and Veluvine to Somaro will raise £24m. Jarvis said it was still looking to offload the loss-making facilities management and unfinished construction projects.
