WYG buys itself time for rescue deal

Consultant engineer White Young Green has deferred a covenant test date for a third time as rescue talks with lenders continue over its estimated £90m debt-pile.

The date has been moved until the end of September and is expected to be rolled over for a fourth time to the end of October as talks continue.

The waiver means the company will not breach lending terms as a result of its high debt, a move that could result in its bankers pulling the plug on the company.

In a statement to the City this morning, the company said: “The board expects to announce the group’s final results for the year ended 30 June 2009 during the second half of October.”

The debt was racked up during a spending spree in which the company blew £85m buying 18 others in five years.

Meanwhile, WYG is understood to be preparing a share issue of about £40m to cut its debt pile.

The deal may also result in the company de-listing from the main stock market under rules that stipulate that 25% of its shares must be freely tradeable rather than being held by institutional investors. It would either move to the alternative investment market or become a private company.

One source close to the situation said: “There are still a lot of moving parts, but the bottom line is that the company needs to remove the debt from its balance sheet. The only question is who buys the shares. It will either be existing shareholders, new shareholders or the banks – or a combination of all or some of them.”