Shareholders feel pain in Mouchel debt deal
Shareholders in Mouchel are set to see their investments all but wiped out after the troubled motorway maintainer's creditors agreed to write off £87m of its debts in return for control of the company.
The debt-for-equity swap will see creditors such as Royal Bank of Scotland, Lloyds and Barclays assuming the majority of Mouchel's shares in a deal that involves paying existing investors 1p a share – or a total of about £1.14m – in addition to writing off more than half of its borrowings.
The company will be left with about £60m of debt following the deal, which needs shareholder approval.
Mouchel's chief executive Grant Rumbles said: "This deal secures the future for our 8,000 staff and gives us sustainable levels of debt which will enable the business to return to profitability by the end of the year."
"This will make existing and new clients comfortable about having contracts with us," added Mr Rumbles.
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