The company is continuing to review several takeover bids including the well publicised one from Costain as well as others from bidders rumoured to include Balfour Beatty and Carillion.
Mouchel is also proceeding with the attempts to sell parts of its business that it regards as non-core to help make an additional £30m repayment to the banks by May 2012. Hawkpoint has been appointed to advise on the sales.
Chief executive Richard Cuthbert said of the refinancing: "This is an important turning point for Mouchel. It provides the group with stability and ensures that we can continue to compete successfully in our chosen markets.”
Key features of the banking agreement are:
- Total facilities of £170m extending to 31 March 2014
- Interest margin on the facility of 3.1% - 4.0% dependent on ratios
- Two repayments each of £7.5m on 31 July 2012 and 31 July 2013
- In the event that an additional voluntary repayment of £30m has not been made before 31 May 2012, an increase in margin of 2% and the issue of warrants at that time over 5% of the issued share capital of the company at an issue price of the lower of 75p per share and 80% of the share price at that time
- A restriction on resuming dividend payments until the voluntary repayment of £30m has been made.
Mouchel says that, as part of its review of operations, it has already achieved a full-year cost savings target of £25m, and is continuing with further cost reduction programmes.
At the end of January, the group's order book is expected to be approximately £1.7bn with a pipeline of tenders and near term opportunities at around £2.0bn.
Cuthbert added: "Although we are still operating in challenging conditions, the fundamentals of our business and the medium to long-term opportunities for the group remain strong. Mouchel came to the stock market on the back of the major public service reforms of the eighties and nineties; the present government's policies will offer a second major catalyst to growth for Mouchel. With our new facilities and our leading market positions in our core businesses of local government outsourcing, public sector consulting, highways and water, we look forward with renewed confidence to implementing our strategy, working with organisations across the UK public sector - and in selected overseas markets - to improve the quality and efficiency of public services."
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