Eatonfield raises £7.4m
A PROPERTY company led by one of the stars of Channel 4’s Secret Millionaire series has been forced to secure extra capital to avoid his company going into administration.
Eatonfield chief executive Rob Lloyd, who appeared in the TV series earlier this year, has pumped £800,000 into the company as part of a share placing which raised £7.4m.
The troubled Cheshire-based group has placed 147.2 million new shares at a price of 5p with existing and new investors.
The investors include Mr Lloyd, executive chairman Paul Williams, other senior employees and certain members of Mr Lloyd’s family.
But the fundraising, which has raised £6.9m after expenses, is subject to wider shareholder approval at its general meeting on November 19.
If the placing fails, the company could be placed into administration, as the renegotiation of bank facilities with The Royal Bank of Scotland and Allied Irish Bank are reliant on its success.
Around £3.85m of the money raised will be used for working capital, with £2.1m being used to reduce the group’s net debt.
The remaining £0.95m will be used for the further development of the company’s Port Derwent site, where it has an option to purchase a further 265 acres; its Birkwood site in Lanarkshire; and the Paignton site in Devon, which it is negotiating to buy from administrators of the collapse of Modus Paignton Limited for £10.1m.
Mr Williams said: “Despite intense financial pressure over the last 18 months we have made significant progress on our flagship projects as well as our other sites.
“By strengthening our balance sheet and creating additional working capital, Eatonfield is now well placed to benefit from a change in sentiment towards the UK property sector and to take advantage of opportunities that may arise.”
Eatonfield, which in June lost its only non-executive director in an apparent cost-cutting exercise, added that it is to appoint two new ones once the placing had completed.
The group also said it had cut costs by reducing headcount by 25 staff to 11 and by reducing the pay of senior employees including both Mr Williams and Mr Lloyd.
Net debt at October 23 stood at £29.5m, comprising £27.3m of project borrowings secured against individual sites and £2.15m of overdraft borrowings.
In its most recent interim results for the six months ended 31 December 2008, the Group reported a pre-tax loss of £10.33m on turnover of £5.04m.
