WYG plans capital restructuring

The company said there had been new wins by the recently established businesses in South Africa, Croatia and Bosnia-Herzegovina.

The company recorded gross revenues of £121.5m for the nine months to 31 March 2011. In the year ended June 30 2010 the figure was £220.6m. International revenues increased by 8 per cent, on an annualised basis, and now represent around 35 per cent of the total.

The net debt at March 31 2011 had reduced to £29.2m. In the year ended June 30 2010 the net debt figure had been £33.9m.

The company said an operational restructuring was now substantially complete with headcount reduced by more than 50 per cent and the company’s cost base hade been cut by £110m.

In a statement, the company said: “As announced on March 31 2011, the board has been reviewing the group’s capital structure. The board has entered a collaborative process of negotiations with the group’s lenders and, recognising that the group’s current level of debt is unsustainable, has, since the March announcement, considered a full range of alternatives to address the company’s capital structure and to allow the strengthened operational business to grow.”

The company expects to announce a capital restructuring which includes proposals to raise £30m, net of expenses, by way of an equity fundraising and convert the group’s net debt, excluding some restricted cash balances, into convertible shares and redesignate its preference shares into deferred shares.

The planned equity fundraising will be conditional upon the lenders’ formal agreement and shareholder approval and, if completed, will involve a “very significant dilution” of existing shareholders;

The statement added: “The board has received positive feedback from certain prospective institutional investors and has signed non-binding heads of terms in relation to the proposed capital restructuring with the lenders. However, should the relevant approvals not be received, or the proposed equity fundraising ultimately prove unsuccessful, then the group would be unable to satisfy its financial covenants and/or service its existing borrowings under the terms of its current financing arrangements;

“The board expects to announce details of the proposed capital restructuring very shortly, and no later than June 30 2011.”

Paul Hamer, the chief executive, said: “The operational restructuring of the business is now substantially complete and WYG is much better placed to exploit the opportunities available to us in our chosen international markets. The immediate priority now is to complete a successful capital restructuring which would enable us to realise those opportunities, to retain and attract talent.”