Shareholders in beleaguered offshore safety company Cosalt were yesterday in effect told to accept a knockdown offer or watch the business plunge into receivership.
The chairman David Ross, best known as the co-founder of Carphone Warehouse, is offering £400,000 to take the company private. The 0.1p a share price represents a discount of 71 per cent to the shares' Thursday close, after doubts were raised about its ability to continue as a viable business.
Mr Ross, whose great grandfather co-founded Cosalt, intends to inject £5m into the business, which is reeling under the weight of a £14m debt mountain together with a £9m pension deficit, to enable it to continue trading while he negotiates with its lenders. He has pledged to safeguard the employment and pension rights of about 300 staff if the offer is accepted and goes unconditional.
The company's independent directors said other large shareholders had said they were not willing to put more funds into the group and described the offer as "fair and reasonable" having taken advice from broker Evolution. Maurice White, senior independent director, said: "The company is in a difficult situation. A practical solution is required."
Cosalt said earlier this week that it was looking at restructuring options because it lacked the funds to continue business beyond the end of the month. Mr Ross, whose holds nearly 15 per cent of the shares, has already pumped £10.4m of equity funding in since 2006, as well as £7.2m in loans and bank guarantees.
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