Engineer agrees war chest for growth through takeovers

ENGINEER Redhall has announced new debt facilities of £25m, with £20m of facilities committed until 2015 and a £5m overdraft.

The 20m facility replaces the group's previous 14m facility which was due to expire in April 2012.

Analysts at Altium said the new arrangement will give the company more firepower.

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"The management have been early in renewing their debt facilities compared to many other UK corporates with impending debt expires," they said in a note.

Redhall is eyeing up "half a dozen" acquisition targets and aims to do a deal within the next six months.

The Wakefield-based group, which lost out in the bid for Mount Engineering in October, is focusing its sights on high margin takeover targets that will complement its existing operations.

Chairman David Jackson said that with 9m cash in hand and 25m of banking facilities, the group can bankroll an acquisition of up to 20m. A bigger deal would be funded by raising money from investors.

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Speaking of the new debt facilities, he said: "We are delighted to enter into this new relationship with HSBC and welcome their commitment to the future growth of Redhall.

"This new four-year facility is a testament to the balance sheet strength that we have created over the last five years and provides a platform to take the group to a new level."

Redhall is looking at opportunities in both the energy and defence markets and is looking at companies in the UK and abroad, with Poland a possible target.

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