Elliott gives refinancing details with 29m pounds losses

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B ELLIOTT, the engineering group, yesterday announced a pounds 28m refinancing, along with losses after extraordinary items of pounds 29.2m for the year to 3 April.

The losses included extraordinary restructuring costs of pounds 18m and left the company with negative shareholders' funds of pounds 18.3m and debts of pounds 36.3m.

Michael Frye, chief executive, said Elliott's machine tool business had been devastated by the recession, suffering an 80 per cent drop in demand in the period from October 1991 to March this year. However, he added that the group was now trading profitably. Elliott made operating profits of pounds 2.2m in the six months to 2 October, although there was a pounds 487,000 pre-tax loss after interest charges on the large debt burden.

The group has disposed of its machine tools merchanting business and its South African subsidiary, Goldfields Industrial Corporation. When the restructuring is complete, the group will consist of three divisions: specialist engineering, electrical engineering and machinery, Mr Frye said.

The total workforce has been reduced from a high point of about 3,000 to 1,150.

The refinancing involves an injection of pounds 9.5m led by Falkner Moller Partners, the venture capitalists, giving it between 40 and 47 per cent of the company.

Elliott's bankers will swap pounds 16.3m of debt for 8.9 per cent of the ordinary share capital and 6 million preference shares. Existing ordinary shareholders will end up with 10 per cent of the company.

Elliott shares were suspended at 3p in October, when the refinancing talks were announced.