(Alliance News) - Leeds-based Braime Group PLC on Wednesday said it had secured a GBP1.5 million loan to help fund its chain cell project.
The manufacturer of metal press work said it has received a GBP1.6 million quotation for its chain cell project. In addition, the company anticipates surveying, legal, architectural and project management fees of GBP300,000.
The cost of the project has increased from the GBP850,000 estimate at the year-end, Braime said.
This increase is in part due to inflation on construction materials, but more significantly, Braime now plans to "enhance" the area rather than just repairing the external walls.
The plans to enhance the area, which account for GBP870,000 of the total cost, involve more than doubling the area available for the production of 4B Chain, creating a new mezzanine area for additional storage and achieving other operating efficiencies, the company said.
Construction is expected to take around fifty weeks.
Braime added that it is in discussions with its bankers HSBC and have secured a GBP1.5 million development loan to fund the construction. The company expects to convert all or most of this into a five year term loan, with interest accruing annually at a rate of 2.75% above base rate, when construction is complete.
The balance will be paid with Braime's existing cash resources, the company said.
Shares in Braime were untraded at 1,600 pence in London on Wednesday afternoon.
By Sophie Rose; sophierose@alliancenews.com
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Braime Ord (BMTO)