Group Restructuring

 

The future of the operating subsidiaries of Heywood Williams Group PLC has been secured by a significant capital restructuring.  A new, stronger group will continue to serve its customers and, backed by additional financing, will enhance its relationships with suppliers, creditors and employees.
 

HIGHLIGHTS

  1. Over 1,000 jobs secured worldwide
  2. £6 million of new investment for the new Group from its UK banking syndicate
  3. Banks to write off £21 million of debt in return for a major stake in the new Group
  4. Business as usual with the same board and management teams in place across the Group

The actions implemented today, in conjunction with the steadfast support of the Group's UK banking syndicate, will secure the future of the Group's operating companies.
 
Robert Barr, Chief Executive of Heywood Williams Group PLC, says:
 
“This restructuring solution secures over 1,000 jobs, protects the members of the UK pension fund, and allows Heywood Williams, our suppliers, and our customers to continue with business as normal.  The new Group has a great future ahead and we look forward to guiding it into a period of growth as our markets start to recover.  The banks’ support demonstrates their faith in the strength of the underlying business.”
 

BACKGROUND
Poor conditions in residential housing markets have had a dramatic impact on the Group’s companies in recent years, with a significant reduction in demand for their products.  Whilst the worldwide economy is starting to show signs of stabilisation, commentators expect a slow recovery over a number of years.  The restructuring completed today sets Heywood Williams on track for future growth and value creation through the economic recovery and beyond.

 
KEY ELEMENTS OF THE RESTRUCTURING

  1. Heywood Williams’ UK banking syndicate will provide the new Group with £6 million of additional financing to support the growth of the business as markets start to recover;
  2. The syndicate (Lloyds Banking Group and National Australia Bank) has agreed to write off £21 million (nearly 40%) of the Group’s existing debt, which will significantly reduce future interest payments and strengthen the balance sheet;
  3. No loan repayments to the banks until the end of 2013;
  4. Agreement with the independent UK pension trustee of a new 17 year payment schedule for the UK defined benefit pension scheme, with no deficit repair contributions until 2014;
  5. Heywood Williams is now backed by two major international banks, who will be the major shareholders in the new Group with collectively 80% of the shares.  An Employee Benefit Trust will have 10% of the shares and the remainder will be held by the Group’s Executive Directors;
  6. Three divisional managing directors, Jason Anderson, Rick Karcher and Martin Wardhaugh will join the Group Board as Executive Directors of the new Group.  The banks are appointing Mike McTighe as their representative on the board.  Bill Schmuhl will step down from the board after 13 years as a Group Board member, although Bill will continue to be the Non-Executive Chairman of LaSalle Bristol.  Roger Boyes will continue as Chairman and Graham Menzies and Steve Rogers will continue as our Non-Executive Directors.

 

Following this morning’s General Meeting of shareholders and the appointment of Daniel Butters, Bill Dawson and Neville Kahn of Deloitte the business advisory firm, as Joint Administrators to Heywood Williams Group PLC, a sale contract has been exchanged between the Administrators, the Company and a newly incorporated company, Arran Isle Limited, which gives the Administrators the ability to implement the transfer of operations to the new Group.  Completion of the sale is expected to be effected within 28 days.  None of the trading companies are subject to insolvency proceedings. 
 

The shares of Heywood Williams Group PLC will be delisted from the London Stock Exchange as of the start of trading on 21 October 2009. 
 
Daniel Butters, Joint Administrator, commented:

“This transaction brings to a close an uncertain time for Heywood Williams, a substantial and established business in the Yorkshire region.  It provides certainty for the Group, its employees and trading partners in Europe, the US and Asia.”

Heywood Williams Group PLC Appointment of Administrators