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22 September 2009
BLACKS LEISURE GROUP plc
COVENANT STANDSTILL
As a result of recent, unexpected difficult trading in the group's Boardwear division and at its loss-making stores, the group has underperformed against budget for the first six months of the financial year to August 31st 2009. As a result of this underperformance, the Directors anticipate that there will be a financial covenant breach under the Company's bank facilities when tested at the end of September.
The Company has therefore been holding constructive discussions with its bank, Lloyds Banking Group, regarding this expected breach as well as the restructuring plan that the Company is currently considering to turnaround the business which, in particular, seeks to address the group's loss-making stores and Boardwear division.
Following these discussions the bank has agreed in principle to a standstill in respect of any breach of the relevant financial covenant until 30 November 2009, subject to documentation and the Company delivering a restructuring plan, acceptable to the bank, addressing the future viability of the group, including actions to achieve an exit of the Company's loss-making stores, by 30 October 2009. Any waiver of the covenant breach is likely to be conditional upon such a restructuring plan being implemented.
To assist it in developing its restructuring plan, the Company has appointed KPMG to work with it to evaluate the full range of options available. If a waiver of the covenant breach is not ultimately given, the ongoing prospects of the group will be uncertain.
A further announcement will be made in due course. The interim results are expected to be published towards the end of October 2009.
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Blacks Leisure Group plc |
01604 597 222 |
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Neil Gillis, Chief Executive |
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Citigate Dewe Rogerson |
020 7638 9571 |
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Simon Rigby |
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Kevin Smith |
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Singer Capital Markets |
020 3205 7500 |
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Jeff Keating |
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Jos Trusted |
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