Albemarle & Bond jobs at risk as rescue plan rejected
The stock has lost 97% of its value in the past 12 months
Monday 24 March 2014
More than 100 jobs at Albemarle & Bond could go after its lenders pushed the struggling pawnbroker closer to the edge of collapse today.
Barclays and Lloyds, to whom Albemarle owes more than £50 million, rejected the management’s rescue plan for the pawnbroker over the weekend.
Albemarle — which has been crushed by a collapsing gold price over the past year as well as increased competition — has currently deferred a test of its banking covenants until March 31.
Barclays and Lloyds have signalled that they might be willing to extend this deferral in “certain circumstances”.
But if they decide not to, the pawnbroker could be forced to repay all of its outstanding loans, sending the company under. Founded in 1983, the company has 188 stores and more than 1000 employees.
Management are working on “alternative options” with lenders, none of which is likely to ascribe any value to the shares, which were suspended on AIM today at 6.75p “pending clarification of the group’s financial position”.
The stock has lost 97 per cent of its value in the past 12 months — this time last year, shares were trading at 208.5p. Potential options include a firesale to its biggest shareholder, US pawnbroker EZ Corp.
The company — which holds just under 30 per cent of Albemarle — refused to underwrite a £35 million rescue rights issue last year, but might be tempted back as a buyer if the pawnbroker falls into administration.
An attempt to sell the business — which also attracted interested parties including Jon Moulton’s Better Capital — was wrapped up at the end of January after no bid was “deemed to represent fair value”.
Profits for the year to June slumped 75 per cent to £4.9 million as the tumbling gold price cost the company £7.4 million.
Despite Albemarle’s problems, former chief executive Barry Stevenson managed to walk away from the business with £631,000 last year, up from his salary of £345,000 in 2012.
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