SHAREHOLDERS in Accident Exchange Group face significant dilution as the vehicle replacement firm nears a refinancing deal with its senior lender and plans a conversion of its unsecured notes.
The cash-strapped company, whose chairman once was Lord Young of Graffham, said it planned to cancel its shares from the Official List and delist them from the London Stock Exchange to effect the refinancing.
Accident Exchange shares, which had traded as high as 495p about four years ago, closed down 65 per cent at 3.38p after yesterday’s announcement. The group had a market capitalisation of only £7.3m at Tuesday’s close.
The company, which provides courtesy vehicles after crashes, said talks with its lead lender Morgan Stanley to amend its existing £40m credit facility continued to progress and that they had reached an agreement in principle.
In March, Accident Exchange said future compliance with its banking covenants required ongoing flexibility from its main banker and that it hadn’t operated profitably during the four months to the end of February.
Any formal amendment to the facility was conditional upon conversion of the company’s £50m convertible notes due 2013, Accident Exchange said in a statement.
The company also delayed reporting results in 2010, saying it could not finalise accounts until it refinanced.