Simon reaches agreement on banking facilities

Simon Engineering, the company best known for making fire rescue access equipment, took a significant step towards financial stability yesterday, writes Robert Cole.

It announced yesterday that it had reached agreement on new banking facilities. The company also launched a rights issue to raise pounds 52m. The five-for- nine issue is pitched at 100p. In the market shares fell from 121.5p to 118.5.p

Simon has been hit hard by recession on the Continent of Europe and by the low oil price, which has strangled demand for its petrochemical industry-related services. New management has restructured Simon but, scarred by large exceptional write-offs, losses for the year to 31 December were pounds 160m.

Asset sales had enabled the group to reduce borrowings from pounds 148m in the middle of 1993 to about pounds 127m presently. The pounds 52m rights proceeds will bring to ratio of debt to net assets down to 65 per cent.

Simon's strapped financial position means payment of dividends on the company's preference shares, due on 1 July, will be delayed until after 1994 interim results are published in October. Ordinary dividends were passed for 1993 and will not be paid for 1994 either.

Senior Engineering is also holding a rights issue, to raise pounds 67m to fund acquisitions and increased working capital requirements. Senior's pre- tax profits for the year to 31 December were pounds 25.3m against pounds 6.3m - the comparable figures were hit by substantial asset write-offs. Underlying earnings per share were 7.1p (6.26p). The dividend was 3.4p (3.15p).

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