Cosalt chairman offers £5m lifeline

COSALT chairman David Ross has offered to lend the company £5m of short-term cash to keep it trading, while shareholders continue to weigh up his offer.

The Grimsby-based company agreed the unsecured facility with the Carphone Warehouse co-founder after its main lenders Royal Bank of Scotland and HSBC refused it more cash.

Mr Ross, who hopes to de-list the company, has given shareholders until December 20 to accept his controversial offer of 0.1p per share. One major shareholder, Brookwell, has labelled it “insulting and derisory”.

However, Cosalt’s independent directors have recommended shareholders accept his offer as “the most realistic means of securing the company’s future”.

Cosalt provides services to the offshore oil and gas markets including heavy lifting and lifeboat maintenance. The company recently warned it only had enough cash to trade until the end of November.

Cosalt added if Mr Ross’s offer for the company has not been declared unconditional by December 22, and no other short-term funding is available, it will try to extend the repayment date of the facility.

However, if Mr Ross’s offer is declared unconditional and the facility is repaid, the company said he would be prepared to lend it £5m of longer-term funding for growth. Mr Ross has lent or invested another £13m in Cosalt since 2006, and also provided £4.6m of bank guarantees.