Banks deny clash over Clydesdale refinancing

Click to follow
The Independent Online
THE BANKING syndicate to Clydesdale Group, the electrical retailer that called in receivers on Friday night with debts of pounds 35m, has denied claims that a split in its ranks caused the collapse, writes Russell Hotten.

Management at Clydesdale, which employs 1,500 at 135 stores in Scotland and England, claimed that Royal Bank of Scotland refused to support a refinancing plan.

Last night a source at Clydesdale's lead bank, the Bank of Scotland, called the claim 'absolute rubbish'. He said: 'All the banks were prepared to support the company if additional capital came from institutional investors. Only Scottish Amicable was prepared to come up with fresh money, and that was on terms unacceptable to the banks.'

Yesterday, Clydesdale's receiver, Allan Griffiths, of Grant Thornton, said he had no immediate plans to close stores or make redundancies, but this was under constant review. He had already received inquiries from potential purchasers and was hopeful of selling the group as a whole. He admitted high street trading conditions were not ideal, citing trading statements from retailers such as Dixons.

Clydesdale, one of Scotland's largest and most high-profile retailers, ran into problems in the 1980s and called in Henck Van Eck, a company doctor from the Netherlands, to sort them out.

He then embarked on an expansion programme, opening several superstores in the North of England and the Midlands, but the plans foundered in the recession. Clydesdale's business plan called for a flotation to eliminate borrowings, but the listing was pulled last May due to alleged management differences. In November an attempt to raise capital via a private placing failed when institutions refused to subscribe.