Tissue maker aiming to bounce back with £18m share placing
Troubled Lancashire tissue maker Accrol Group is bidding to raise £18m on the AIM after trading in its shares resumed today (Monday, November 20), following suspension six weeks ago.
Five directors of the Blackburn company, including chairman Peter Cheung and newly-appointed chief executive Gareth Jenkins, are themselves to invest £200,000 in the share placing.
Accrol is awaiting sentencing in January after pleading guilty to a health and safety offence which led to an employee suffering serious injury to a finger.
The Health and Safety Executive has told the company that it is seeking a fine in the range of £550,000 to £2.9m.
Accrol also said it would implement plans to review and improve its health and safety procedures.
The company, which announced 89 redundancies at its Blackburn factory last week, already has a revolving credit facility of £16m, reducing to £14m on April 30, 2018, and an invoice discounting facility of £23m.
It has reached agreement with HSBC Bank to revise its covenants in line with the directors’ current expectations of trading.
Cheung said: “The past few weeks have been extremely challenging for Accrol and its shareholders, as we navigated our way through industry-wide issues and sought a solution to the group’s short-term funding problems.
“We believe that the business is through the worst and thank all our investors for their patience, during the period of suspension.
“The board is very grateful to the company’s shareholders and its bank for supporting the business through this difficult period.
“Our new chief executive, who joined the company on September 11, is already having a positive impact on the business.
“He has completed a full operational review and a restructuring is now underway.
“Gareth’s considerable industry knowledge and proven track record for delivering significant operational efficiencies give the board confidence going forward and we look forward to providing regular updates on the group’s progress.”
