Connaught has secured £15m of additional funding from its lenders to help the contractor through a cash flow crisis.
Two days ago, the troubled construction and maintenance specialist made an urgent cash call after admitting its debt was soaring and that it would breach its banking covenants by the end of the year.
In a statement today, Connaught said that it “is pleased to announce that it has now agreed with its lenders the terms of an additional £15m, short term overdraft facility, together with deferral of interest and principal payments due on its existing facilities in July and August. The overdraft facility is available immediately.”
This facility will be in addition to the firm's current facilities of £200.6m.
Connaught said it will continue negotiations with its lenders in the coming weeks with the aim of restructuring its financing for the longer term.
It added that it is continuing a review of its current year trading performance and the implications this may have on its full year financial performance.
Chairman Sir Roy Gardner said: “We are delighted by this tangible evidence of support from our lenders. We will now seek to put in place arrangements which will leave Connaught on a more secure footing for the longer term.”
Connaught is still without a chief executive, after Mark Tincknell's departure last month, and has suspended its northern division managing director Peter Jones pending an investigation into share dealing.