Â£5m lifeline thrown to Chorley company
A Lancashire-based company has been thrown a Â£5m lifeline after a turbulent period during which it was forced to suspend its shares.
Consumer professional services company Fairpoint suspended trading in its shares on AIM after its bank AIB refused to provide ongoing financial support.
Earlier this year the Adlington-based firm announced it was “restructuring” to improve efficiency and reduce its debts.
It said it was moving away from its debt management services and concentrating on legal services through its wholly-owned subsidiary Simpson Millar.
Yesterday the company, which employs around 400 people in Adlington, was notified by AIB Group (UK) plc that AIB has assigned its debt due from Fairpoint to Doorway Capital Limited.
A spokesman said yesterday: “In addition, the Company announces that Doorway, a specialist provider of capital to law firms, has today provided a Receivables Funding Facility of up to £5 million to Simpson Millar LLP, the Company’s wholly owned Legal Services business.
“The Facility will provide additional working capital for Simpson Millar.”
Last week Fairpoint said it had been notified by AIB that it was unwilling to provide the level of on-going support requested by the company.
As a result, the group was unable to sign-off the audit of its annual report and accounts for the year ended 31 December 2016.
Consequently, the company would not be in a position to publish its annual report and accounts for the year ended 31 December 2016 by 30 June 2017 as required by Rule 19 of the AIM Rules for Companies.
Dealings in the company’s ordinary shares were temporarily suspended under AIM Rule 40 until such time as its accounts have been duly published in compliance with AIM Rule 19.
Estimates put Fairpoint’s net debt at the end of 2016 at around around £19.9m .