M6 Toll parent looks to restructure liabilities as losses reach £36m
THE parent company behind the operator of the M6 Toll has said it hopes to tie up a major restructuring of its financing arrangements with senior creditors by the end of the year.
The announcement comes as latest accounts for Midlands Expressway Ltd reveal the company has current liabilities to its parent, Macquarie Motorways Group Ltd (MMG) of £611m (2011: £597m).
MMG reveals in the accounts that it is in talks with several creditors with a view to amending the terms of its existing senior facilities and associated interest rate hedging arrangements.
It states: “As at the date of this report (September 30, 2013) commercial terms to amend and extend MMG’s existing financing arrangements has been agreed with a majority of secured creditors. This agreement has been negotiated on the basis that the revised terms provide the group with an affordable future by amending the maturity date and payment terms of MMG’s term debt and swap obligations, and resetting covenant headroom levels.”
It adds that while formal agreement has yet to be fully implemented, the company is hopeful of reaching an agreement before the end of the year.
The move comes as the full year accounts for the year ending December 31, 2012 show MEL making a loss of £36,734,000 (2011: loss £41,656,000).
MEL said trading for the full year was affected by a continuing weak economy and comparatively high fuel prices. However, it said the start of a two-year programme of roadworks to widen the M6 through Birmingham had had a beneficial effect to the business from Q2 onwards and this was set to continue until the end of the roadworks next spring.
However, the end of the scheme represents a real threat to the future prosperity of the toll motorway.
It states in the report: “The subsequent improvement to traffic flows on the M6 on completions of the works may provide significant challenges to traffic flows and revenues longer term from 2014.”
Toll revenue for the 12 months to December 31, 2012 reached £58,051,249 (2011: £55,898,791). Traffic volumes over the period were 13,065,951 (2011: 13,036,038).
