Connaught lenders come to rescue

The repair and maintenance specialist, which has a number of social housing maintenance contracts across Yorkshire, has been in turmoil since its warning last month that Government spending cuts could blow a 200m hole in revenues over this year and next.

With the company's need for additional funds seen as "urgent", Connaught has agreed an additional 15m short term overdraft facility, as well as deferral of payments on existing facilities in July and August.

Sir Roy Gardner, who became chairman of the Exeter-based company in May, said the agreement was "tangible evidence" of support from its lending syndicate, which is led by Royal Bank of Scotland and also includes Lloyds Banking Group.

"We will now seek to put in place arrangements which will leave Connaught on a more secure footing for the longer term."

The firm, which has around 180 multi-million pound social housing contracts, said on Monday it expected to breach banking covenants as net debt would be well above the previously advised level of 120m.