Future secured at WYG after crucial vote
AROUND 2,700 jobs have been secured at design and engineering consultancy White Young Green after shareholders voted in favour of a major refinancing deal.
Chief executive Paul Hamer said the “overwhelmingly positive” support from shareholders – 95% voted in favour of the proposals on Wednesday – was a strong endorsement that the Leeds-based company had a bright future.
Mr Hamer told TheBusinessDesk.com: “This is the beginning, rather than the end, of the story. It’s the beginning of a new chapter for the company.
“We are going to try to make the business more lean, more focussed and more resilient.”
The group has worked on major construction projects in Yorkshire including new stands at York Racecourse and Yorkshire County Cricket Club’s Headingley Carnegie ground.
Mr Hamer said the refinancing deal had “created a stable, long term financial future for the company, secured around 2,700 jobs and provided renewed confidence to our clients”.
The debt-for-equity swap saw shareholders accept a significant dilution of their stakes by approving the plans. The alternative would have meant their stakes being worth nothing and the business probably being placed into administration.
The refinancing deal has seen the group’s banks – Lloyds, The Royal Bank of Scotland and Fortis Bank – convert around £53m of debt into equity and provide new lending facilities of £58.25m and €38m of committed bonding facilities.
The banks have taken 60.5% ownership of the company, while 24.5% has gone to staff and management and 15% to existing shareholders.
As existing shareholders’ holdings in the company have been diluted, the company will move from the main Stock Market to the Alternative Investment Market (AIM).
Mr Hamer said that although WYG was optimistic about its future, much hard work still needed to be done. He could not rule out further cost cutting measures, but said the company would drive its growth strategy forward to improve trading performance.
“We’ll be refining the business rather than restructuring it,” he said: “We are very, very cautious about what may come in 2010. There’s going to be a general election and there seems to be a unanimous feeling that public sector spending will be cut.
“I think it will be 2011 before we see markets coming back.”
Mr Hamer said part of WYG’s strategy would involve growing its overseas business. WYG presently operates in more than 40 countries.
“The approval by shareholders of our restructuring has endorsed a fresh start for WYG despite the fact, as previously indicated, that the group continues to face challenging market conditions.
“With a new leadership team and a restructured balance sheet, we will be putting in place fundamental building blocks to enable us to benefit from profitable opportunities at home and internationally, while continuing to take a prudent and cautious view of the market.”
He added the company, which will be rebranded as WYG following the deal, was proud of its Yorkshire base in Leeds and had no plans to relocate.
