London Scottish looks for a buyer

LONDON Scottish Bank is looking for a buyer after failing to raise regulatory capital of £32.5m.

The Manchester-based lender said it would have to either sell the group or its debt purchase and collection subsidiary Robinson Way & Company.

In May, Robinson Way agreed a new revolving credit facility that required the group to raise at least £32.5m by October 31.

It failed to achieve this, “in light of the prevailing market conditions”. Under conditions attached to the deal London Scottish has to find a buyer – for the group or Robinson Way – by June 30, and the facility’s maturity date has been brought forward a year to May 2010.

In a statement London Scottish said: “As previously announced, the company continues talks regarding the possible sale of the group as a whole. There can be no guarantee that such discussions will lead to an offer being made.”

The bank facility was provided by a syndicate of 10 banks led by HSBC and the Royal Bank of Scotland. It was made up of a revolving credit facility of £83.5m for Robinson Way and a £1.5m overdraft facility for the group.

At August 31 the group had a net debt of £238m.