Rok not like Connaught19 Sep 2010 15:28
Rok cuts dividend as interim profits halve - Aug-17Lombard: Rok and a hard place - Aug-12Rok admits ‘serious mismanagement’ - Aug-11“We have commenced discussions with our banks with a view to renewing our banking facilities,” said the company. “The timing of that refinancing is in line with the requirement to put new facilities in place in the early part of 2011.”
However, the group’s banks are in the process of drafting in PwC independently to verify Rok’s accounts and financial forecasts ahead of the talks, people close to the situation said.
The move to bring in the accountancy firm comes in the wake of Rok’s profit warning last month that “serious mismanagement” of contracts in its plumbing, heating and electrical business would force it to make writedowns.
“It is part of a wider review of the business and not to do with one specific issue, but it was triggered by what has been going on over the past few weeks,” one of the people said.
One of the people added that the move would be done in partnership with Rok and it would not be imposed on the company.
Rok, which employs local builders to carry out repair work for insurance companies, put in place a £90m, three-year revolving credit facility from Royal Bank of Scotland, Clydesdale Bank and HSBC which is due to expire in March 2012.
Of this sum, £51.3m had been drawn at the end of its year 2009. The company is expecting to reduce its borrowings, however. Rok is expected to appoint KPMG to advise it in its talks with lenders.
RBS transferred the loans to Rok to its internal restructuring department in June, because it recognised the company needed “additional care and attention”, a person familiar with the lender’s thinking said.
The accountancy firm is expected to start its work before the end of the year.
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