(Bloomberg) -- Eddie Stobart Logistics Plc secured a rescue loan from four banks, giving the British trucking firm a year to address its troubled finances, the Sunday Telegraph reported.
Belgian lender KBC Group NV, Allied Irish Banks, Bank of Ireland Group Plc and BNP Paribas SA, which are owed 200 million pounds ($257 million) in total, are taking part in the rescue plan hatched by private-equity fund DBAY Advisors Ltd. The banks have agreed to waive the firm’s banking covenants until early 2021 and defer loan repayments until July, the newspaper reported, citing people it didn’t identify.
Eddie Stobart received a takeover approach from DBAY in September after a review revealing overstated earnings estimates forced out former Chief Executive Officer Alex Laffey. Lower earnings, poor cash recovery and slower returns from new contracts have caused the firm to depend more heavily on available credit facilities and debt.
Andrew Tinkler, who ran Eddie Stobart Logistics as CEO of Stobart Group, is also in talks about mounting his own rescue plan and is putting together a 125 million pound package, the Financial Times reported earlier this month.
The accounting scandal dealt a fresh blow to fund manager Neil Woodford, whose firm controls about a quarter of the stock. Woodford has faced spiraling difficulties since he shocked the financial world in June by freezing redemptions from his flagship fund.
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