Eddie Stobart braced for long haul in lender talks

Eddie Stobart braced for long haul in lender talks
By: Business Posted On: October 08, 2019 View: 13

Eddie Stobart braced for long haul in lender talks

The struggling haulier Eddie Stobart Logistics is bracing itself for crunch talks with its lenders as it races to finalise half-year results that have been delayed amid an accounting crisis.

Sky News has learnt that the company's lenders have drafted in Alvarez & Marsal (A&M) to advise them on a potential restructuring of its debt facilities.

The move comes as rival bidders weigh possible offers for Eddie Stobart - best-known for its fleet of distinctive green-and-red trucks on motorways across Britain.

City sources said on Tuesday that Eddie Stobart had appointed Deloitte to work alongside Rothschild on discussions with its lenders.

The company had net debts of about £155m at the half-year stage but has been unable to publish financial results for several weeks amid investigations into accounting issues.

Eddie Stobart's London-listed shares have been suspended pending clarification about its earnings.

The details of negotiations about its borrowings are still to be finalised, but sources said lenders were likely to "play hardball" with the company.

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The two publicly declared suitors for Eddie Stobart have been given until next week to finalise offers or walk away, but the value of any formal bids is likely to disappoint shareholders, according to insiders.

A vehicle controlled by Andrew Tinkler, the former boss of Stobart Group, the owner of Southend airport, is one of the contenders to buy Eddie Stobart.

The other is DBAY Advisors, which bought 51% of Eddie Stobart from Stobart Group when Mr Tinkler was running the combined entity five years ago.

The putative bidding battle floats the intriguing prospect of Mr Tinkler returning to a company that he ran successfully for a decade until 2014 and which was for years part of the wider Stobart Group.

Eddie Stobart's descent into crisis has prompted the ousting of its chief executive and triggered a statement from the company that it was reviewing all strategic options, including an equity-raise.

It also said it was scrapping its final dividend.

The emergence of Mr Tinkler as a possible bidder adds a further chapter to a corporate saga that gripped the City last year.

The businessman was sacked as a director and then mounted a legal case to be reinstated, accusing the board of gerrymandering the vote to keep him at bay.

A bitter legal fight then ensued which found that Mr Tinkler had breached his director's duties but also resulted in Stobart withdrawing its allegation that he had made improper expenses claims.

Mr Tinkler has a considerable following in the City, having delivered a total return to shareholders of 261% during his ten-year tenure at the helm of the unified Stobart Group.

His acrimonious departure has not diminished his desire to play a role in the future of the two companies which carry the Stobart name.

Mr Tinkler still owns about 5% of Stobart Group, which has operations in aviation, energy and infrastructure.

To complicate matters, Stobart Group also has an economic interest in its former sister company.

The crisis at Eddie Stobart has delivered a further blow to the embattled fund manager Neil Woodford, who owns more than 20% of the company.

The company's shares have performed dismally since its return to the stock market in 2017.

They listed at 160p, valuing the company at more than £570m, but are now worth just 71p.

The shares have slumped by 47% in the last year alone.

An Eddie Stobart spokesman declined to comment.

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