Optare agrees short-term loan

BUSMAKER Optare has secured a short-term, high interest loan of up to £1.5m from its investors.

The Blackburn and Leeds-based business has agreed to the 90-day facility, which carries interest of 8% over the base rate, to help it cover its ongoing operational and working capital requirements.

In a stock market statement the AIM-listed company did not disclose the identity of the lender only describing it as the “parent company of one of its major shareholders”.

This is likely to be the Indian Hinduja Group, parent company to Ashok Leyland which took a 26% stake in Optare in the summer. At the time Optare said the deal would enable it to improve cashflow, increase export sales and tap into low cost sourcing channels.

In October Ashok Leyland’s managing director joined Optare’s board along with Dr V Sumantran, also a board director at Ashok Leyland as well as being executive chairman of Hinduja Automotive.

The company said it considered the terms of the facility to be fair and reasonable.