DX Group has sold five of its properties and taken a loan from its biggest shareholder to pay back a bank loan.
The group has committed to a sale and leaseback of its sites in Thatcham; Basildon; Rotherham; Northampton and Nottingham. The deal with Chancerygate (Livingston) is due to complete on 29 September.
The sale of the land is to repay a term loan to HSBC, and DX Group had considered selling its Willenhall freight hub in order meet the full sum, it said in a statement today.
However, because the hub is of “strategic value” to the business, it opted to borrow £2m from its largest shareholder, Gatemore Capital Management, to cover the difference in the repayment.
Gatemore managing partner Liad Meidar added: “The Gatemore loan has enabled the company to pay down HSBC’s term loan while retaining the freight hub in Willenhall. This gives the company greater financial and operational flexibility, setting the stage for the refinancing.
“We expect to roll our loan shortly into the new financing, positioning DX with a healthy balance sheet and a new start under proven leadership.”
DX Group chairman Bob Holt said: "We welcome the support of our shareholder, Gatemore, alongside that of our bank, HSBC, as we proceed with our standalone transformation strategy, and will provide a further update on the company's financing arrangements within coming weeks."
Gatemore increased its shareholding in DX Group in May in order to combat the proposed acquisition of John Menzies Distribution, which fell through last month.
The business said that with the repayment of the loan to HSBC, DX is “taking all the steps we would expect of a company poised to begin an effective corporate turnaround – cleaning up the balance sheet in advance of the upcoming financing and preparing for the new board appointees to take over”.
DX said it the repayment of the term loan to HSBC was part of ongoing discussions to increase its financing with the bank, including the extension of its invoice discount facility.
