Albemarle & Bond (ABM) shares halved after the pawnbroker failed to secure support for a £35m rights issue from its major shareholder, US consumer finance group EZCORP. Accordingly, the group has signed an agreement with its banks to postpone a test on earnings based covenants for a month to 30 October. The company warned earlier in the week that these were in danger of being breached.
As a result of the deferral agreement, undrawn commitments under the company’s £65m lending facility with its banks have been cancelled, leaving the company with net debt of around £51m. It has also appointed former Provident Financial executive director Chris Gillespie as its new chief executive, while the deferral means that a restructuring officer must be appointed by 10 October.
Albemarle & Bond has been badly affected by the sharp decline in gold prices, and 33 loss-making pop-up gold buying stores are being closed down. Even the core pawn broking business has been hit by increased competition and dwindling levels of gold jewellery in circulation.
