Markheath meeting to discuss refinancing

MARKHEATH, the struggling property company, warned yesterday that its net assets had fallen below 50 per cent of its share capital. It postponed its full-year results announcement and called an extraordinary meeting, as it is obliged to do under the Companies Act, to discuss refinancing.

Ian Creber, finance director, said: 'This is not as sinister as it looks. We normally announce our prelims at about this time but because of ongoing talks with our banks we are not in a position to. We hope to get our report and accounts out by September.'

Mr Creber added that a refinancing should be finalised by then, although he declined to say what form it might take. Markheath's shares, which were worth more than 100p in 1989, fell 1.25p to 5.75p.

Net debts in January, the latest available figure, were pounds 67m. Mr Creber said there had been no property disposals since then to reduce the outstanding borrowings. Net assets have now fallen below pounds 15.3m.

Talks with Midland and ANZ, Markheath's two banks, have been under way since last November, when the company breached covenants referring to two buildings where rental income had failed to cover interest costs.

Yesterday's announcement said negotiations were 'continuing in a constructive manner'. Mr Creber added that the fact that the banks had not insisted on further property disposals was a vote of confidence. The company has appointed Coopers & Lybrand, the accountants, to advise it.

Markheath was felled by the property slump and a short-lived foray into engineering in 1991. In the year to March 1992 there was more red ink after hefty property write-downs.