Hawtal Whiting wants borrowing rules changed

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The Independent Online
HAWTAL WHITING, the car designer and engineer, said yesterday it was in breach of its articles of association and would be calling an extraordinary meeting to change the rules governing its borrowing powers, writes Tom Stevenson.

The breach occured when the company's borrowings rose to pounds 14m compared with shareholders' funds of pounds 3.6m. Hawtal's articles forbid borrowings of more than three times net assets.

Chris Russell, finance director, said: 'The group is not in breach of any loan covenants and we still have the confidence of our bankers.' Hawtal's problems were exacerbated when Leyland DAF went into receivership with pounds 1.1m of fees owing to the company.

Hawtal was helping design a van for a joint venture with Renault. The French car maker has taken over the project.

The bad debt contributed to a pounds 1.5m exceptional charge, which also included other doubtful debts and redundancy charges. That led to a pre-tax loss of pounds 2.2m compared with a profit of pounds 197,000 in 1991. There was a loss per share of 40p and the dividend was passed.

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