Struggling retailer seeks working capital injection to support its recovery

Doors and windows specialist, Safestyle, says it has engaged with “a number of third parties” who have expressed interest in investing in the group.

The Bradford-based company, which last month forecast an underlying loss of £9.5m to £10.5m and expects its net debt to be between £5.5m to £6.5m at the end of the year, adds these discussions with both existing shareholders and other third parties have been “productive” and are still ongoing.

Safestyle stresses it remains compliant with the covenants of its £7.5m borrowing facility.

However, it has warned this morning that if the losses forecast for the remainder of the year materialise, this would lead to a material shortfall versus the existing covenants of its revolving credit facility (RCF) in November.

In its update, the business explains: “Alongside the discussions with existing shareholders and other third parties, the Board has had good discussions with the group’s bank, who have remained supportive, regarding renegotiating terms of the RCF in the form of a covenant waiver.

“This is yet to be formally agreed and is expected to be inter-conditional with the working capital injection referred to above.

“The Board remains confident it will secure the ongoing support required to enable the group to navigate the near-term challenges presented by what is a difficult market context.

“Looking further ahead, the Board maintains that growth recovery prospects are strong and data of an ageing housing stock in need of repair underpins this.”

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