Stobart Group PLC (LON:STOB) has said the terms of the exchangeable bond in holds in Eddie Stobart Logistics PLC (LON:ESL) has not been impacted by the recent change of ownership in the trucking firm, which on Wednesday saw trading in its shares resume on AIM and the publication of its long-delayed interim results.
In a statement, Stobart Group noted that the exchangeable bond - issued in May 2019 - is guaranteed by the company and on aggregate is exchangeable into 11.8% of the currently issued ordinary shares of Eddie Stobart Logistics.
It noted that the exchangeable bond does not fall due for repayment until 8 May 2024
Stobart Group is an 11.8% shareholder in Eddie Stobart Logistics and continues to retain ownership of the Eddie Stobart brand.
The company said: “That brand continues to be valuable and Stobart Group believes it will play an important role in the long-term future of Eddie Stobart Logistics.”
Shares in Eddie Stobart Logistics resumed trading at 7.25p each on Wednesday, nearly 90% lower than the price they were suspended at back in August last year after a £2mln black hole was found in its accounts, sparking a review of its revenue policy.
The firm was saved from liquidation in December by shareholder DBay Advisors after other investors backed a financing and acquisition package for the haulier.
DBay, which already owns 10% of the shares, offered to inject cash into the group in the form of high-interest loan notes in return for a 49% stake.
The transaction provided £70mln of additional liquidity for the group, putting Eddie Stobart Logistics back “on a stable footing and providing a platform from which to develop”.
Big impairment charge
The company’s interim results, published today showed an underlying loss (EBIT2) for the six months ended 31 May 2019 of £11.6mln, against a restated profit of £0.6mln in 2018, in line with the announcement made on 14 November 2019.
The group said it recognised a £169.2mln impairment charge, which reflected “current business performance and challenging trading conditions, an increased discount rate associated with higher gearing and a more prudent assessment of medium and long term forecast profitability.”
Eddie Stobart Logistics saw its revenue in the period grow by around 26% year-on-year, representing a 6.4% growth in the underlying business and a strong first half contribution by The Pallet Network.