Sacrifice behind UPF placing

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The Independent Online
THE CHAIRMAN and the finance director of UPF, the engineer seeking a market listing, sacrificed an equity stake potentially worth pounds 5m to secure a refinancing in 1992, when the company needed a pounds 300,000 extension to its overdraft facility.

The directors had their combined equity stake diluted from 21 to 8 per cent when they were obliged to ask venture capital backers for emergency funding.

UPF specialises in the production of chassis components for four-wheel-drive vehicles, including the Land Rover. It was a management buyout in 1990 from the receiver of Parkfield, which collapsed after its entertainment ventures went sour.

UPF is raising pounds 7.5m in a placing that will value the concern at pounds 40m.

Without the dilution caused by the refinancing, the directors' stake would have been worth pounds 8m, instead of the pounds 3m value which the flotation will give it.

Keith Evans, chairman and chief executive, and Tim Bell, finance director, will raise pounds 500,000 each by selling half their remaining shares.

Profits from continuing business suffered in 1992, falling to pounds 64,000 from pounds 2.5m.

However, last year's operating profit bounced back to pounds 4.2m and the company said it expected operating profit of pounds 5.4m for the year to 31 August.