Kennedy seeks window of opportunity with banks

X The Business Desk

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BUILDING Plastics Holdings, the holding company for entrepreneur Brian Kennedy’s window manufacturing empire, has breached its banking covenants and is in ongoing talks with lenders over its debt pile of more than £30m.

The company, whose 26 subsidiaries include Macclesfield-based window frame maker Spectus Systems, Latium Management Systems, Clitheroe-based conservatories maker Ultraframe and Everest, has just filed accounts for the year to December 31, 2008 which show a pre-tax loss of of £13.3m on sales of £91.2m.

The accounts were filed late as a result of the company’s ongoing negotiations with bankers over its debts.

By its 2008 year end, the company had net debts of almost £32m. Its net assets had also dwindled from £15.9m to £3.4m.

It owed £21.75m to its main lender, Bank of Scotland, £7.4m to National Australia Bank and £1.3m to another company controlled by Kennedy.

Notes accompanying the accounts show that it has since managed to renegotiate its debts with Bank of Scotland, which has extended two term loans and renewed its overdraft.

However, it has been unable to agree a new deal with National Australia Bank after it breached the covenants of its loan agreement.

The group’s auditor, KPMG, said that its ability to continue as a going concern was “dependent upon the group directors concluding their ongoing negotiations with lenders, including agreeing a waiver in relation to current covenant breaches, a resetting of those covenants and an additional capital contribution in relation to a loan of £7.4m”.

Since its year end, however, another Kennedy-controlled company has injected a further £5.5m worth of loans into the business.

Building Plastics Holdings was previously known as Latium Plastics Holdings and acquired Ultraframe in a £29.2m public-to-private deal in June 2006. Prior to this purchase, Ultraframe had incurred heavy losses.

The company was contacted about its accounts, but declined to comment.