Eddie Stobart has asked shareholders to back a £55m rescue deal from private equity firm Douglas Bay Capital Fund (Dbay) or risk going bust.
It comes following claims from the former head of the Stobart Group, Andrew Tinkler, that he has shareholder backing for a £70m rescue.
Shareholders are due to vote on Dbay’s offer to buy a 51 per cent majority stake in the company for £55m on 6 December.
The company is running out of cash and needs this deal to be completed or it will face the possibility of going bust, City A.M. understands.
Eddie Stobart has said the Dbay offer is the “only concrete offer to date which has the support of the Lenders and secures the long-term future of the Company.”
On the possibility of a bid from Tinkler, it said that his company, TVFB, had only signified a “highly preliminary expression of interest” having previously ruled out making an offer.
An announcement on Friday also said: “Currently, the Dbay proposal is the only proposal that has secured the necessary amendments to the Credit Facilities and is therefore the only proposal able to be implemented with the consent of the Lenders. “
If the deal does not seal approval at next week’s general meeting, however, it could mean the company goes bust, the notice warned.
It said that the lenders “would not be supportive of any proposal by the Company to seek to instigate a new or further process to find a buyer for the Company (or parts of it) or to raise equity funding.”
Dbay already owns around a 10 per cent stake in Eddie Stobart after doubling its five per cent share in June.
The company issued a profit warning earlier this month with losses expected to exceed £12m for the first half of this year.
The publication of its results was also suspended after a review of its accounts uncovered a £2m error in its 2018 results.
The company’s shares were suspended in August as a result.
Those losses combined with “poor cash collection” and dividends paid out means Eddie Stobart is expecting its debt to stand at £200m by the end of the year.