Amey clinches £221m banking rescue and names new chief

Amey managed to pull off an emergency refinancing deal yesterday, which will allow it to make vital disposals.

Unusually, the arrangement gives the banks, led by Barclays and Bank of Scotland, the right to buy 5 per cent of the company's equity at about the current lowly share price. The stock rose 2p to 21.5p yesterday.

One insider said: "This gives the banks the ability to share in some of the upside from here."

The deal with its bankers gives Amey a new £221m facility, after it had breached the covenants on its existing loans at the end of last year.

The news will come as a relief to the market, which was concerned that there might have been problems with the refinancing.

Amey said: "The actions which have been taken to enable the continuing group to focus on its core strengths, reduce both costs and net debt, improve cash flow plus the provision of adequate bank facilities provide the board with a platform to rebuild the company's value."

Yesterday was the last day the company could have made the financing announcement, ahead of a planned extraordinary general meeting to approve a £30m sale of Amey's Private Finance Initiative equity stakes to Laing. "It went right down to the wire," the source said.

Stephen Rawlinson, an analyst at Arbuthnot Securities, said: "It could have been worse. The banks could have insisted on a debt-for-equity swap ... but I think they cannot continue without making further disposals."

Amey also announced it had appointed Mel Ewell, currently its chief operating officer, as group chief executive. Mr Ewell, who joined Amey from Securicor a year ago, will replace Brain Staples, who resigned last month.

The company stated that exceptional charges for the full year to 31 December will total £115m. Before accounting for this, earnings before interest, taxation and amortisation will be £27m.

Amey had to withdraw its declared dividend last year and yesterday's statement made it clear that it cannot now pay any dividends without the agreement of the banks. This makes payouts unlikely in the near term.