Tuesday, September 11 08:59:48
Cork-based renewable energy group Kedco is restructuring its finances in a bid to raise more money from investors to unlock the value in future projects. Kedco is looking to remove the debt from the company's balance sheet and have its creditors take an equity stake in the company. The Kedco group will remove E10.8m in debt from the group, as well as selling its 80pc stake in SIA Vudlande, a Latvian saw mill. The decision to sell the Latvian operation is part of the group's strategy to return to its core business in Ireland and England.
As part of the plan, some of the lenders will write off 40pc of the interest owed. All of the group's lenders will convert outstanding loan capital into a stake in the company. Interim CEO and finance director Gerry Madden described the development as very positive for Kedco, as it has the backing of its creditors. "It is a very positive step that the debt holders are taking equity in the group," said Mr Madden. "It allows us to go and seek money in the markets."
Kedco noted in its interim results from Dec 2011 that if it was not able to secure funding, it could be forced to cease trading. "Kedco noted that its ability to continue as a going concern was contingent upon additional finance being made available for the company's working capital requirements and a successful outcome to debt restructuring initiatives undertaken by the group," Kedco said.