Troubled loo roll firm agrees new lending terms

Troubled toilet paper manufacturer Accrol has announced it has agreed new lending terms.

The Blackburn based company issued a statement in March in which it revealed it was likely to breach its covenants.

This morning the firm issued a statement to the Stock Exchange which revealed new terms have been agreed.

Under the new agreement a scheduled reduction in the limit of the revolving credit facility which was due to occur at the end of April has been deferred until 31 October 2018.

Terms have also been agree for the lease funding of the new conversion line being installed at the firm’s Leyland plant in the next three months, which will allow the business to service major new business wins.

A statement said: “These revised banking arrangements, which are subject to the company complying with certain undertakings to the lender during May, with which the board expects to be able to comply, will help to support the growth of the business and enable the new management team to pursue the business recovery plan.

“The group is pleased to announce that it has recently entered heads of terms on the exit from the onerous central distribution hub in Skelmersdale. This planned exit is expected to have a positive impact on annualised profits, as previously reported, of at least £5m.”

In March the AIM listed firm said it expected to report a LBITDA of around £5m for the financial year, a turnaround from underlying earnings (EBITDA) of £16.1m the year before.

Last year the firm’s shares were suspended on the AIM market.

At the time the firm also revealed that a health and safety incident, which happened prior to its IPO in 2016, was likely to result in a significant fine.