- 22 September 2017
- Transport / Logistics Services
As part of its new management and restructuring plans, troubled DX Group have raised £6.5 million.
The money is to finance a standalone transformation strategy and is being raised through a mix of sale and leasebacks on property, as well as an unsecured loan from its largest shareholder, Gatemore Capital Management.
DX transformation plan comes after the collapse of the plan to merge with Menzies Distribution. The delivery and logistics company is raising £4.5 million from a property sale and leaseback deal with ChanceryGate (Livingston). Gatemore are loaning a further £2 million.
The transformation will principally involve repaying DX’s loan from HSBC. This is a first step of a plan to comprehensively refinance the firm.
In a statement, DX said it was currently “in close and constructive discussions with certain key shareholders regarding this broader refinancing.
“This is necessary because the board has identified a near term material funding requirement, over and above the company’s existing resources, to address a working capital shortfall, caused by the company’s recently reduced levels of profitability, and to provide funds for the planned investment into improving the financial performance of the DX business.
Chairman Bob Holt said: “We welcome the support of our shareholder, Gatemore, alongside that of our bank, HSBC, as we proceed with our standalone transformation strategy, and will provide a further update on the company’s financing arrangements within coming weeks.”
Liad Meidar, managing partner of Gatemore Capital Management, said: “The Gatemore loan has enabled the company to pay down HSBC’s term loan while retaining the freight hub in Willenhall. This gives the company greater financial and operational flexibility, setting the stage for the refinancing. We expect to roll our loan shortly into the new financing, positioning DX with a healthy balance sheet and a new start under proven leadership.”
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