BELEAGUERED housing maintenance firm Connaught will press ahead with talks with lenders this week to thrash out a last ditch refinancing.
Among the options being considered is a debt for equity swap, which would hand control of the FTSE 250-listed company to its creditors.
A person familiar with the situation said yesterday it would be “very surprising” if the company were not forced to surrender at least some control in exchange for a financial lifeline. Connaught has already arranged payment deferrals in August, but will come under pressure from creditors again in September.
Another option is a rights issue, but with shares changing hands at just five per cent of prices seen before a surprise profit warning in June, insiders believe the firm would struggle to raise enough cash.
Shares were suspended nine times on Friday, as investors flocked to dump the stock following Connaught’s announcement that it would write down assets and suffer “material losses” this year. The firm lost half its remaining value, closing with a market cap of just £21.7m.
New chairman Sir Roy Gardner pleaded with investors on Friday to stick with the ailing firm. “This is a business worth fighting for and I ask for your continued support,” he said.