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Energis seeks to amend bank covenants, looking at restructuring bonds
New York, Feb. 21 - Energis plc said it is talking to its bank lenders about amending covenants and that it is looking at a possible restructuring of its bonds.
The covenant amendment is for the credit facility of Energis' U.K. holding company Energis Holdings Ltd. Energis said it expects it will not be able to comply with the covenants.
Energis said it is also proposing to draw down funds from the facility to provide liquidity for its UK operations.
Meanwhile, cash balances at Energis plc will be used to support other group companies until they can be sold.
Following a strategic review, the company said it believes is Continental European business have "attractive prospects" but added that they need "significant" further funding.
"Accordingly the company believes it is appropriate actively to pursue the disposal of its Continental European businesses," Energis said.
Because Energis does not expect to be able to make continuing transfers of funds from EHL to Energis plc over the medium-term, the company is also looking at options for "a more appropriate" long-term financing structure for Energis plc. Among those options are restructuring its bonds.
Prompted by "the changed market environment," Energis' strategic review looked at ways to improve cash generation and EBITDA growth.
The company said that the review confirmed its core UK operations are expected to be free cash flow positive before interest during the next financial year. These activities are expected to account for 75% of overall revenue and 125% of its EBITDA for the year ending March 2002.
Energis also said that National Grid Group plc has told it the company "should not assume that it can rely on NGG for additional financial support."
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