Volex extends bank agreement

ELECTRONIC cables group Volex has extended its £54.3m credit facility with its bank for another 27 months.

The Warrington-based company has agreed with Lloyds TSB Bank plc to extend the expiry date of of the loan, which was due to expire in December 2009, to March 2012.

In a statement to the stock market the company said that the four covenants contained within the existing facility have been reduced to a single leverage covenant.

The margin payable is dependent on the leverage ratio of the company, although Volex said minor changes have also been made to the rates to reflect current market practice.

Chairman Mike McTighe said: “The extension of our existing banking facilities is a significant achievement within the currently challenging financial environment, and reflects positively on the confidence that the board and our financial partners have in the prospects for the business.”

The company also said that an extraordinary general meeting will be held on March 31, for shareholders to approve the sale of the  Wiring Harness division, announced in February.

Mr McTighe added: “The combination of these two developments leaves management well positioned to focus on further improvements in the Company’s remaining profitable and cash generative divisions.”

Last week, the company said chief executive Heejae Chae had left the business role after nearly three years at the helm, during which time he led a major restructuring.

It is undertood Mr Chae had lost confidence of senior boardroom colleagues and was asked to go.