Pentos dealing halted

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The Independent Online
Shares in Pentos, the retail group that owns Dillons bookstores and the stationers Rymans, were suspended yesterday morning as the financial crisis at the group threatened to put the company out of business before the end of today. The shares dived before trading was halted.

Pentos's future hangs in the balance as bankers and venture capitalists meet today to decide whether to pump in £20m of new funds to keep the company going. Without the money the company will collapse into liquidation.

In a statement, Pentos said it was in discussions with its bankers and other potential investors about a refinancing package to save the company.

The company said: "In view of the comments and rumours in the weekend press, the company has requested dealings in the company's shares on the London Stock Exchange be temporarily suspended with immediate effect."

The company said a further announcement would be made as soon as practicable.

The crisis comes as two banks, Barclays and Midland, have warned they are considering not giving it the extra finance. The banks have already given the company a £55m facility, repayable on demand, which expires today. They have said they would be prepared to extend the existing facility, but any extra funding will need to come from elsewhere. A Pentos spokesman said:"The banks have engaged in extraordinary brinkmanship, putting the company on the rack when they have known for a long time now that 28 February was the crunch date."

The shares had fallen 3.5p to 4.5p by mid-morning, before they were suspended.