Belfast Telegraph

Saturday 1 November 2014

Company Snapshot: Resource Services Group Ltd

Financial restructure

Resource Services Group is a Northern Ireland registered company with several trading subsidiaries in England as well as being the parent company of Resource (NI).

The companies have a range of contracts specialising in contract cleaning, security and other support services.

Resource Services Group was the successor to the Maybin group which it bought several years ago.

The key feature in the registered report and accounts for the year to March 2010 is an explanation of the capital restructuring which will become clearer in the accounts to March 2011. Resource was sold in September to a group of its former directors and senior management, who have completed complex negotiations with their bankers, (the former) Anglo Irish Bank, to restructure the capital base of the group. In advance of the capital restructuring, the group has taken an impairment charge of £28.5m into its operating costs to March 2010. This reflects an adverse judgment on the value of intangible assets.

The recent capital restructuring has created a pro forma balance sheet value of shareholders' funds which moves from a deficit of £58.2m to a positive value of £20.4m. Underpinning the change are, first, transactions affecting Resource (NI) where a loan note of £20m was replaced by an issue of preference shares of £22m and, second, an agreement by the group bankers to provide a new debt facility of £12m, reduced from the £68m facility that was being carried.

After the pro forma changes the amount due to creditors after one year of £83.7m is reduced to £14.6m.

The bank, in writing down its debt, has agreed it will be paid 67% of the equity value should the group be sold. The agreement also allows the bank to convert the fee into an equity stake by subscribing for 67% of the ordinary share capital of the new company.

This financial restructuring has allowed the group to report it can continue as a going concern.

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