Cosalt in last-ditch debt talks

SHARES in oilfield support services group Cosalt plunged 36 per cent yesterday after it warned investors its working capital reserves would only last it until the end of the month.

Cosalt, which is in takeover talks with its chairman and biggest shareholder, David Ross, said it had just £900,000 of bank facilities left to draw and was in the process of appointing restructuring advisers to find ways to refinance or sell assets.

The group had a net £12.3m of debt at 16 November and said then that it would breach its £14.9m bank loan limit before the financial year end.

In an update, Cosalt warned that its “cash flow position has continued to deteriorate” and it was “now in urgent discussions with its major shareholders and banking partners.”

In a separate announcement it said it had reopened talks with its lenders and was “in further dialogue with its funding partners” over the debt.

Ross, who holds about 15 per cent of Cosalt’s shares, put in an indicative offer to buy the rest of Cosalt for £405,000 and take it private.