Cosalt warns on rising pension scheme debts

Cosalt, the Lincolnshire based company which provides life jackets and safety harnesses for the oil and gas industry, has said that it is continuing discussions with its lenders in an effort to find a solution to its financial difficulties, but warned the deficit on its pension scheme has grown.

Cosalt, the Lincolnshire based company which provides life jackets and safety harnesses for the oil and gas industry, has said that it is continuing discussions with its lenders in an effort to find a solution to its financial difficulties, but warned the deficit on its pension scheme has grown.

The group's main defined benefit pension scheme is now believed to have "increased materially" above the £9.0m figure given at the end of 2010. The pension contribution holiday that was previously agreed with the group's pension trustees has expired and the group was due to recommence payments in October 2012. However, the company has been "unable to agree a recovery plan with the pension trustees" and "payments have not recommenced".

The firm currently has debt levels of about £17m in bank loans and working capital facilities, with these facilities expiring on December 31st 2012.

The company issued a statement on Monday 31st which said: "The group has continued to incur operating losses during 2011 and 2012 and its operating businesses are only able to continue normal operations with the support of working capital facilities provided by David Ross and Oval Limited.

"However, at the time of the offer made by Oval Limited on November 25th 2011, the independent directors [...] explained the uncertainty facing the group owing to its trading prospects and funding position, that key shareholders had been consulted, but were not prepared to inject further equity and that other courses of action, such as the sale of some of the company's remaining assets or businesses, did not present a viable alternative to the offer as they would be unlikely to produce any value for shareholders due to the level of the group's net indebtedness. This remains the company's belief."

NR

Recommended

The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
23 Jan 2023
The top ten dividend stocks in the FTSE 250
Share tips

The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investo…
17 Jan 2023
The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into accord…
5 Jan 2023
Investing trends to watch out for in 2023: what analysts say
Investment strategy

Investing trends to watch out for in 2023: what analysts say

What are sensible strategies for high inflationary times? We ask analysts to find out.
22 Dec 2022

Most Popular

House prices could fall 30%. Should investors be worried about a repeat of 2008?
Investments

House prices could fall 30%. Should investors be worried about a repeat of 2008?

Some analysts are predicting that house prices could fall as much as 30%, which, when compared to the fact that prices have jumped 28% since April 201…
24 Jan 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Wholesale gas prices are on a downward trajectory, but does this mean lower energy bills later this year?
27 Jan 2023
Council tax increases 2023 – how much more will you pay?
Tax

Council tax increases 2023 – how much more will you pay?

Your council tax bill will go up in April - we reveal the councils that have confirmed what this year’s increase will be.
23 Jan 2023