Historic firm agrees to £10m debt facilities as it battles to balance the books

Leather goods firm Pittards has agreed a debt facility of £10m with its banks as it battles to balance its books.

The Somerset company announced a fundraise in March which meant it could manage its working capital until May.

It was announced that, depending on the size and structure of the new facilities further equity or debt may also be required to provide some funding for growth and fully return the company’s creditors to a normal profile.

The directors estimated that this additional funding could have been up to £3m.

Pittards has now agreed indicative terms for the restructuring of its existing debt facilities for its UK business with Lloyds Bank, for approximately £10.1m.

The principal change being the restructuring of the company’s existing overdraft facilities into a two year term loan of £7.7m with the other facilities remaining largely unchanged.

The proposed new debt facilities are conditional on the company completing an equity fundraise of £1.5m.

Plans for the equity raise are under way and include discussions with a cornerstone trade investor.

In order to facilitate the conclusion of an equity raise Lloyds Bank has agreed to extend the company’s existing banking facilities until the end of July.

In the meantime company continues to operate at or around the ceiling of its bank facilities.

The audit of the company’s accounts for the year ended 31 December 2022 will not be completed as required under AIM rules.

As a result, the company’s shares will be suspended with effect from Monday until such time as the audited results are published and sent to its shareholders.

It is expected that the results will be published in two weeks’ time.