James wants $50m to put bus maker back on route

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The Independent Online

Corporate troubleshooter David James is close to refinancing troubled bus maker Henlys in a deal that could include a $50m (£27m) cash injection from creditors.

Corporate troubleshooter David James is close to refinancing troubled bus maker Henlys in a deal that could include a $50m (£27m) cash injection from creditors.

Mr James, who has committed to being executive chairman for three years, is holding talks with two sets of creditors. A group of 14 banks, led by Lloyds TSB and Royal Bank of Scotland, are owed $321m, while Swedish car maker Volvo is owed $150m.

Talks revolve around a debt-for-equity swap. Mr James, however, is also looking for further funds to turn the company around and prepare it for either a listing or a sale.

"I am looking to achieve an injection of around $50m to give me the headroom I need to expand the business in the next two to three years," he said.

"The business is recovering very strongly at the moment. We have got our production right ... but I need more working capital because I think the market is going to grow."

Henlys' UK operations were dealt a fatal blow earlier this year when the engineering group Mayflower went into administration. Henlys had a 30 per cent stake in the Mayflower venture TransBus and was forced to take a £71m writedown.

The group, which has issued four profits warnings in the past eight months, recently said its shares had "little or no value" and would be delisted from the London market.

The recovery is focused on the US business, the Atlanta-based Bluebird, which makes school buses.

Long term, Mr James may list Henlys on the New York Stock Exchange or sell it to either a private equity or trade buyer. Speculation is that Volvo could be a suitable buyer.

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