Harland & Wolff Group Holdings PLC (AIM: HARL) experienced a substantial 26% surge in early trading following the approval to proceed with discussions regarding a new credit facility.
Renowned for its Belfast shipyard and its focus on infrastructure projects, the company announced that it has received government clearance to advance negotiations regarding a proposed £200 million guaranteed loan facility in collaboration with UK Export Finance (UKEF), operating under its Export Development Guarantee Scheme.
With the combination of current cash reserves and anticipated cash inflows from existing contracts in 2024, the company is confident in its ability to fulfill its working capital needs until the new loan facility is finalized.
The next steps for the company include solidifying the bank syndicate, appointing a lead arranger, and arranging the requisite documentation for the credit and guarantee agreements, as well as the security package to be provided.
Regarding the security package, the company stated, “It is likely that the security package will entail providing the Banks with a first charge on substantially all the assets of the company, similar to what has been provided to Riverstone Credit Partners in March 2022,” as noted in their statement.
Additionally, the company clarified that no warrants are expected to be issued to the banks or UKEF in this process.
