Gradus completes £25m debt for equity deal
MACCLESFIELD-based carpets and flooring accessories firm Gradus has completed a debt for equity swap for more than £25m with its bank.
The deal, which latest accounts show was completed on December 10, gives Lloyds Banking Group a majority stake in the business.
Accounts show that £16m of loan debt, £5.5m of accrued redemption premiums on loans, along with £2m of loan notes and accrued interest were converted into preference and deferred ordinary shares. A further £1.9m of the senior facility was transferred to a mezzanine loan.
Bosses at Gradus took control of the business in 2007, after a £41m deal funded by Bank of Scotland Corporate’s integrated finance arm, since inherited by Lloyds, which increased the management team’s stake to 75%.
Accounts show that pre-tax losses widened to £3.8m for the year to the end of December 2008, from a loss of £2.6m in the 14 months a year earlier.
Turnover increased to £42.1m from £34.5m in the previous 14 months.
In the directors report managing director Steve Watt said market confidence had “disappeared” in the fourth quarter, which impacted the company after a strong first half.
He added that future growth would come from companies with different technologies that want to partner with Gradus to grow their market share in the UK.
The company, founded in 1966, floated on the stock market in 1995 and was bought by Headlam in 1997. Headlam sold the business to Close Brothers in 2001, which exited after the 2007 deal.
