Dares in dispute with trustees over covenant

THE highly geared property developer Dares Estates announced after the market closed yesterday that it was in dispute with the trustees of one of its debenture stocks, writes Tom Stevenson.

The company admits that a fall in the value of properties securing the loan means it has breached a covenant. But it says that it has until October to rectify the shortfall.

The trustees of the loan stock served a 14-day notice on Dares to come up with security on 8 July, six months after the date of the valuation that revealed the breach of covenant. That notice period expired yesterday.

Dares maintains that the terms of the loan gave it six months to make good the breach from the date the valuation was produced by the surveyor, Weatherall, Green & Smith. The company's interpretation extends the period until 14 October. According to the terms of the loan, the trustees are permitted to seize pounds 43m of security against the loan, although they have indicated to the company that they are not 'presently determined' to do so.

Hartstone, the troubled leather goods and hosiery group, has reached agreement with its bankers on a debt standstill until January next year, writes John Murray.

The group also announced new financing for its overseas operating subsidiaries.