Bank puts Harland Simon into cash crisis

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The Independent Online
HARLAND Simon, the troubled control systems supplier named last year as Britain's most successful company, has been thrown into crisis by the refusal of Barclays Bank to release the pounds 8.1m proceeds of a disposal.

Barclays is concerned about Harland's overdraft, which is believed to be around pounds 15m. The bank is thought to have received the money from the sale of a Harland subsidiary on Thursday.

Its refusal to release the money threatens to cause a cash crisis at Harland. Harland was forced to ask the stock exchange to suspend trading in its shares 'pending a clarification of the company's financial position'.

The phrase has become an infamous City euphemism since clarification is frequently followed by the appointment of receivers or administrators.

A Harland spokesman said Barclays was sitting on the proceeds from the sale of Vickerys, a maker of specialist equipment for the paper industry. 'Barclays is looking for the company to come up with some ideas,' he said. Harland hopes to make another statement early next week.

Confidence in Harland's existing management has been all but destroyed in recent months by a stream of bad news. This began with a shock profit warning in February and has continued with concerns about its accounting treatment of its Perfect Information associate, a pounds 6.4m loss, qualification of its accounts, and a stock exchange inquiry into whether Harland had misled the stock market.

Harland's formerly high-flying shares have crashed from a high this year of 655p to 20p at suspension yesterday. Roy Ashman, the former chairman, held out the prospect of 'further progress' at its interim results last December.

David Mahony, the industrial adviser to Hambros Bank who has temporarily resumed the chairmanship, has been looking for a full-time replacement and non-executive directors. But candidates have been wary of a company attracting such adverse publicity.

Harland is also thought to have had problems securing large new orders. The cost of provisions against its involvement with Perfect Information left the group with debts in excess of its net assets of pounds 8.1m at 31 March.

Thermo Electron, the US group that bought Vickerys, said it made the payment on Thursday.

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