Albemarle on borrowed time as cash call fails
Wednesday 02 October 2013
Pawnbroker Albemarle & Bond has just a
month to save itself from collapse after emergency efforts to raise £35 million
from investors broke down.
The firm, which has 230 High Street shops, saw its shares tumble another 31%, or 22p, to 47p as talks with leading shareholder EZCorp over underwriting the deeply discounted rights issue announced on Monday broke down. Albemarle’s business has been hammered by a tumbling gold price this year, putting the firm on course to breach bank covenants linking earnings to its £51 million debt pile.
The firm, which has lost two-thirds of its value in a frenetic three days of trading, said it “has not been able to conclude these negotiations to the satisfaction of the board”. It has been given a month’s grace on meeting the covenant test by lenders Barclays and Lloyds but is also rushing to appoint a chief restructuring officer, who will consider all the options for the business.
These are likely to include administration or a sale to EZCorp, the US pawnbroker that already owns 29%.
The lenders has also cancelled undrawn funds under Albemarle’s £65 million lending facility, slashing it to £53.5 million and giving the firm just £2.5 million of headroom until the end of the month. New chief executive Chris Gillespie does not start until next Monday.
Shore Capital’s Owen Jones said: “The news is clearly disappointing and worrying for existing shareholders. The fact that EZCorp is no longer involved in a potential rights issue, to us, points to acutely difficult trading conditions in the UK pawnbroking arena. A&B has said it will be working closely with its lending banks over the coming weeks in order to find a solution. However, we believe that bank forbearance may be beginning to taper.”
The latest sell-off leaves Albemarle with a market value of just £25 million, down from £150 million at the end of February. The company was founded in Bristol in 1983 with one shop, and listed on AIM in 1995. It bought rival Herbert Brown in 2007.
- 1 PlayStation and Xbox hacked by Lizard Squad
- 3 The Grace Dent Christmas Questionnaire
- 4 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
PlayStation and Xbox hacked by Lizard Squad
Antonio Martin shooting: Black teenager may have tried to ambush patrolman, says police officer's lawyer
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
Boxing Day snowfall set to push even more bargain-hunters online for sales
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Alex Salmond has 'broken his word to the Scottish people' says Scottish Lib Dem leader
iJobs Money & Business
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...