Lighthouse Caledonia has announced today (10th February) a series of actions designed to address what it describes as its ‘constrained liquidity situation’. It is:
- selling assets and biomass
- agreeing refinancing of tis long term debt with its major lender
- converting its accrued short term debt into long term debt with the agreement of a major creditor
- agreeing the writing down of a proportion of its accrued short term debt with the same creditor
The immediate concern in Argyll, host to several of the Lighthouse Caledonia businesses, is with the proposed sale of assets and biomass – so here are the relevant deails announced by the company. It proposes to:
- sell its Loch Seaforth site to Marine Harvest for £2.35million gross
- sell its Loch Eriboll site to Scottish Seafarms for £0.5million gross
The sale of these assets will reduce the company’s harvest volume from 25,500 gwt to 23,500 gwt for 2009.
The company then proposes to sell biomass at Ardyne and Strone to EWOS for £2million gross. This is proposed under the following terms described by Lighthouse Caledonia:
- EWOS will purchase the biomass at a fair value, feeding the fish to harvest weight and covering the feed cost and mortality risk
- Lighthouse Caledonia will take the other associated costs and will buy the biomass back from EWOS at the point of harvest and at a pre-defined price.
The proposed refinancing arrangements depend upon a successful equity issue of 150million Norwegian Kroner. The Company is seeking to raise new equity of 150-200million Norwegian Kroner (NOK) through what it describes as ‘a private placement’ with existing shareholders and new investors.
The application period for this will be from today – 10th February – to 13th February 2009 at 18.00 hours Central European Time (CET) and the period may close earlier or be extended at the Company’s discretion. The subscription price will be NOK 0.10 per share and the minimum subscription amount in the private placement will be NOK 500,000.
Should this equity issue succeed, the agreed refinancing arrangements include:
- extending the maturing of its long term debt from 5 to 8 years
- reducing its long term loan from £20.6 million to £15.1 million through the sale of assets and through debt repayment with semi-annual instalments of £1.07 million – the first payment being due on 3rd March 2010
- adopting a new convenant structure described as having: ‘…minimum equity ratio of 35% and NIBD/EBITDA by Q4 2009 of max 4.5x based on EBITDA for the last 3 quarters in 2009 annualised’
In the restructuring of its short term debt the company has made the following arrangments with a major creditor:
- to write down £1million of accrued short term debt
- to convert £3.6million of accrued short term debt to a subordinated loan on the same terms as the restructured long-term loan facility from the main lender which is described above
The company’s announcement contains other regulatory and historical financial performance details but the above is a summary of the key actions it is proposing now to take.
Clearly what is now crucial for the company is the success of the equity issue open for subscription from today until 18.00 CET on Friday (13th February). As For Argyll has reported within the last few days, Lighthouse Caledonia has said that it will make an announcement on or before Monday 16th February. This announcment wll be dictated by the results of the equity issue. Matters wil now be resolved quickly one way or the other.