Eatonfield Share Discussion Threads

[moreforus] 11/4/2011 13:33

obsessed nutter

[bonanza grades] 11/4/2011 13:32

The banks seem to be keeping it alive just so they can recover their debts

[bonanza grades] 11/4/2011 13:32

When is the market going to wake up to the massive dilutive fundraising due ?

[tara7] 11/4/2011 13:31

Saved and going up.!!!

[bonanza grades] 11/4/2011 13:31

Nowhere near good enough I reckon

Especially with the Banks likely to take another hit from the PIIGS

[moreforus] 11/4/2011 13:31

bad luck Bozo Gripes

you can still get 600 quids worth at 0.60p if you are quick

[bonanza grades] 11/4/2011 13:30

-4p you mean ?

[mike111d] 11/4/2011 13:30

That would appear to be a comprehensive and robust plan, setting the company on the road to recovery.

[liquid millionaire] 11/4/2011 13:30

See you all again at 4p +

[moreforus] 11/4/2011 13:30

online buy limit zero

need to fill or kill to buy

see ya stalker is here tops...

[bonanza grades] 11/4/2011 13:29

How stupid does Topliar look now ?


TOPINFO - 7 Apr'09 - 22:07 - 2 of 9


Anyone in at 4p?? Wish I was.!!!

[bonanza grades] 11/4/2011 13:29

Not with MASSIVE DILUTION coming

[topinfo] 11/4/2011 13:28

Look at that chart Robbo. A lot of catching upto do eh!!!

[bonanza grades] 11/4/2011 13:28

Topliar on EFD previously


TOPINFO - 7 Apr'09 - 22:07 - 2 of 9


Anyone in at 4p?? Wish I was.!!!

[topinfo] 11/4/2011 13:27

Excellent news. These were priced to go bust and now they arent!!!!

[bonanza grades] 11/4/2011 13:26

Net debt of over £20m

so this is 'worth'

MINUS 4p

LOL

[liquid millionaire] 11/4/2011 13:25

Monday 11 April, 2011Eatonfield Group plc
Proposed sale of land assets and funding update
RNS Number : 6839E
Eatonfield Group plc
11 April 2011



11 April 2011



Eatonfield Group plc

("Eatonfield" or "the Group")

Proposed sale of land assets and funding update





Eatonfield's board of directors ("the Board") provides the following update on progress made in respect of the previously notified negotiations with its banking partners and in relation to the sale of certain of its land assets. The Board also outlines below its strategy and objectives for the Group going forward and plans for an equity fundraising. Subject to satisfaction of the outstanding conditions noted below, the Board believes that these developments and this strategy will help to prevent further deterioration in the Group's financial condition in the short-term and secure its long-term commercial viability.



Background to the Group's present position



Eatonfield has been in severe financial difficulty since the summer of 2008. Between that date and the autumn of 2009, the Group was adversely affected by falling demand for residential property, which in turn reduced sales of housing units and land and therefore its ability to service its net debt. Eatonfield also suffered from falling loan to value ratios reducing the Group's ability to raise additional debt finance and commercial property market conditions also worsened significantly during this period.



Market conditions remained difficult throughout 2010. The Group's cash flows deteriorated further as a result and equity of approximately £1.2 million was raised during 2010 to provide Eatonfield with sufficient working capital to continue trading.



Brian Corfe and Duncan Syers joined the Board in June 2010 as Executive Chairman and Group Finance Director respectively. Since then, Mr Corfe and Mr Syers have been working with Rob Lloyd (Group Chief Executive) and other members of the senior management team to address the Group's financial difficulties. The Board's focus has been on identifying a strategy to achieve a substantial reduction in the Group's net debt and provide a stable platform for its future development.



The Board is pleased to announce that, subject to satisfaction of the conditions noted below, the first part of this strategy is now almost complete, in summary through the agreement of:



· the proposed exchange of contracts, to take place shortly, for the sale of a significant proportion of the Group's residential land assets to Trilandium Celtic LLP ("Trilandium Celtic"), raising net proceeds between the date of exchange and 30 September 2014 of approximately £6.65 million. The assets comprise residential land at seven sites in Wales.



· Heads of terms for the sale of part of a site at Birkwood near Glasgow to Trilandium LLP ("Trilandium") for approximately £2.75 million.



· subject to exchange of contracts over the Welsh sites, follow-on housebuilding contracts with Trilandium Celtic over 243 units on these sites to commence imminently, with the prospect of similar contracts with Trilandium over 76 residential units at Birkwood, providing the Group with a profitable and sustainable contracting business capable of future growth; and



· proposed revised facility arrangements with certain of the Group's banks, such facilities having, in the Board's view, realistic capital repayment targets, covenant tests and fee charging structures, thus strengthening the Group's financial position.



The sale of the Welsh sites has credit approval from Royal Bank of Scotland plc ("RBS"), which holds a first charge over those sites. The facility documentation is now in agreed form and expected to be formally signed within a matter of days. Once this process is complete, the Board will be in a position to exchange contracts with Trilandium Celtic. The sale of Birkwood will require the consent of all banks that hold charges over the site.



The total net proceeds of £9.4 million from the sale of the Welsh sites and Birkwood will be applied to reducing the Group's net debt, which stood at £26.9 million as at 31 December 2010. Total debt outstanding over the Welsh sites and Birkwood was £6.65 million and £2.75 million respectively at 31 December 2010.



As part of the arrangements for the sale, RBS has also agreed to provide the Group with a £0.25 million working capital facility to support the development of the contract housebuilding operation. As discussed below, the Board also plans to raise further funds through the issue of new equity, the majority of which will be used to clear certain of the Group's outstanding trade creditors.



The Transaction



Overview



Subject to the formal signing of the facility documentation with RBS, as described above, Eatonfield expects shortly to be in a position to exchange contracts for the sale of the Welsh sites. The land assets comprise 243 housing plots. The plots will be packaged into a number of groups and sold in a series of separate transactions.



As part of these arrangements, the Group has agreed to build houses for Trilandium Celtic on the Welsh sites. Pursuant to the sale of the Welsh sites, Trilandium Celtic will be required to make cash payments to Eatonfield in line with an agreed schedule between the date of exchange of contracts and 30 September 2014. Legal ownership of the plots making up the Welsh sites will only transfer to Trilandium Celtic once the relevant cash payments have been received by the Group.



Trilandium and Trilandium Celtic



Trilandium and Trilandium Celtic are specialist residential developers established in 2009 as limited liability partnerships and are based in Leeds. Their business models are to acquire rights to build on residential land without committing substantial capital to acquire the land in advance.



Trilandium and Trilandium Celtic have provided confirmation to the Board that they have access to development funding to support the housebuilding contracts and also has its own cash resources to finance the initial land purchase payments.



The Welsh Sites



Once exchange of contracts has taken place, the sale of the Welsh sites will become unconditional in all but two respects:



· the granting of detailed planning permission on three of the Welsh sites; and



· the Board identifying a solution to issues regarding ground conditions at Cwmanaman Road (one of the Welsh sites).



The Board is confident that the detailed planning permission required will be obtained, thereby enabling completion of the sale of the three sites referred to above to take place in accordance with the schedule agreed with Trilandium Celtic. The Board is also confident that a solution to the issue regarding ground conditions will be identified. The Board has made appropriate assumptions in respect of these matters regarding the timing of the related cash flows in the Group's financial forecasts.



Subject to these conditions being satisfied, the payments relating to the Welsh sites (comprising plots for 243 new houses for a total gross consideration of £6.6 million) due from Trilandium Celtic are expected to be received as set out below:



· £1.0 million during the period from the date of exchange of contracts to 31 December 2011, of which £0.5 million will be paid during April and May 2011;

· £1.7 million during 2012;

· £2.0 million during 2013; and

· £1.9 million in the nine month period to 30 September 2014.



Birkwood

Heads of terms have been agreed by the Board with Trilandium for the sale of part of a site at Birkwood. The land to be sold will be subject to similar arrangements to those for the Welsh sites, with follow-on housebuilding contracts. In summary, the Board has agreed to sell 76 housing plots for a total gross consideration of £2.8 million, to be paid as follows:



· £0.7 million during the period from the date of exchange of contracts to the date ending twelve months thereafter;

· £1.0 million during the period between the first and second anniversaries of date of exchange of contracts; and

· £1.1 million during the period between the second and third anniversaries of date of exchange of contracts.



Any future exchange of contracts on Birkwood will be dependent on the granting of detailed planning permission and the consent of all banks that hold charges over the site.



Contract housebuilding business


Eatonfield has proven expertise in housebuilding, having completed the construction and sale of 43 houses for Pembrokeshire Housing Association, four for Tai Cantref Housing Association and 16 for Jenard Properties Limited ("Jenard") over the last 15 months, realising revenues and gross profits of £4.9 million and £0.45 million respectively. Brian Corfe has substantial experience of the housebuilding industry and intends to grow the Group's business in this area.



Eatonfield and Trilandium Celtic have agreed, negotiated contracts, for the Group to build 243 houses on the Welsh sites with an aggregate contract value for Eatonfield of approximately £25 million.



In respect of Birkwood, Eatonfield and Trilandium have agreed negotiated contracts to build 76 out of a possible 165 houses upon the granting of planning permission. Eatonfield may also have the opportunity in the future to build houses on the 89 remaining plots not subject to these arrangements.



The building of the houses on five of the Welsh sites and at Birkwood is expected to take between three and five years to complete. The housebuilding at the remaining two Welsh sites may take less time.



In addition to these arrangements with Trilandium and Trilandium Celtic, the Group has, subject to contract, agreed to build out for Jenard the remaining plots on its sites at Hook in Haverfordwest and North Park in Cardigan.



Future strategy - summary



The Board is of the view that the exchange of contracts over the Welsh sites will provide the Group with a potential pipeline of future work and increase the scale of its housebuilding activities. A key long-term objective of the Board is therefore to establish a substantial and profitable contract housebuilding operation. The Board's intentions are also for the Group's land trading business to supplement (but not to the extent that it jeopardises) the core contract housebuilding operation on a case by case basis as opportunities arise.



Conclusion



The Board believes that the site sales to Trilandium and Trilandium Celtic will provide the Group with an opportunity over the short to medium-term to strengthen its balance sheet through a reduction in net borrowings. The agreement, in the first instance, to build houses on the Welsh sites and for Jenard, with the potential for similar arrangements at Birkwood will also provide the Group with future income streams and cash flow and thus provide it with the platform to secure its long-term commercial viability.



Bank facilities



Set out below is a summary of the facilities and loans advanced by each of the Group's banking partners, including, where relevant, a summary of the revised arrangements following recent discussions.



RBS



RBS, which holds a first charge over the Welsh sites, has approved the sale of these sites to Trilandium Celtic. RBS will, subject to the signing of facility documentation and the exchange of contracts for the sale of the Welsh sites, also extend the repayment date of loans advanced to the Group totalling £8.81 million, from 31 December 2010 to 31 March 2014. Of the £8.8 million, £5.2 million of the Group's revised capital and interest repayment commitments under these loans will match the anticipated timing of receipt of the proceeds from the sale of the Welsh sites between now and 31 December 2013. A further £1.4 million is scheduled to be received from Trilandium Celtic after the expiry of the RBS facility.



The balance of the capital and estimated future interest repayments due to RBS under these loans is approximately £3.2 million, which can be repaid at any time up to 31 March 2014. In this respect, RBS holds charges over two properties owned by the Group, including the freehold of Haycroft Farm, Eatonfield's Head Office, which is currently being marketed for sale. The Group intends to use the proceeds from any sale of Haycroft Farm to reduce this £3.2 million balance.



As described above, RBS has also agreed, subject to the signing of the facility documentation and the exchange of contracts for the sale of the Welsh sites, to provide Eatonfield with a £0.25 million working capital facility in support of the Group's plans to develop its contract housebuilding operation.



Allied Irish Bank plc ("AIB")

AIB has provided the Group with a £9.9 million facility, secured on a number of land assets including Birkwood, the Corus site at Workington, Cumbria and sites in Driffield, Yorkshire and Pen-Y-Bont, Flintshire.



As discussed above, Eatonfield is in negotiations to sell parts of Birkwood to Trilandium, with any such transaction requiring the consent of all banks that hold charges over the site. Eatonfield is also in discussions with interested parties to sell the sites at Driffield and Pen-Y-Bont, as well as investigating options to generate value from its Corus site. The repayment date of the facility with AIB has been extended as follows:



· to 31 May 2014 in respect of the loan over Birkwood of £2.8 million on condition that the Trilandium payments are made direct to AIB; and

· to 31 August 2011 in respect of the remaining loans.



The Co-operative Bank plc ("the Co-op")



The £4.5 million loan from the Co-op is secured by a first charge over the Group's freehold site at Ystalyfera near Swansea. The Board has, over recent months, been in active discussions with a potential buyer of part of the site. The negotiations have progressed positively and, the Board believes, are now nearing completion.



The Co-op loan was due for repayment in October 2010 and the Group has technically been in breach of the terms of the facility since that date. The Co-op, however, is supportive of the Board's plans to dispose of part of the site and the facility remains available as at the date of this announcement. Once terms have been agreed for the disposal, the Co-op will then complete its credit committee approval procedures to extend the date of repayment on the outstanding balance once the sale proceeds have been applied as a partial repayment.



Anglo Irish Bank ("Anglo")



The £3.3 million loan from Anglo is secured on Eatonfield's freehold property at Europa Drive in Sheffield which is being actively marketed for sale. The Board is confident that the property will be sold in due course and that the disposal proceeds will repay most if not all of the loan.



The Anglo loan was due for repayment on 29 October 2010 and the Group has technically been in breach of the terms of the loan since this date. Anglo has provided the Board with a comfort letter confirming its support of management's actions to repay the loan.


HSBC Bank plc ("HSBC")

Repayment of Eatonfield's £1.2 million facility with HSBC has been extended until 29 November 2011. This loan is secured on the Group's freehold properties in Mold and Buckley in Flintshire, North Wales, both of which are currently at the early stages of being marketed for sale.



Principality Building Society ("PBS")

The repayment date of the Group's £0.35 million facility with the PBS has been extended until 31 July 2011. The Board intends to develop houses on the site on which this loan is secured, subject to further development funding being made available by the PBS.



Equity fundraising



As discussed above, the Board is now seeking to raise equity funding to clear certain of the Group's outstanding trade creditors. The Board is currently at the advanced stages of planning an investor roadshow, expected to take place imminently. The Board believes that any offers of equity funding will be subject to finalisation of facility documentation with RBS and the Co-op. Further updates on the progress of the intended equity fundraising will be provided in due course.



Summary



As announced in the Group's half year report released on 31 March 2011, the Board expects that the Group's existing financial resources will provide it with sufficient working capital until mid April 2011 and the Group clearly remains in a very difficult financial position. The Board believes, however, that the residual funding currently available should provide the Group with sufficient time to agree facility documentation with RBS and the Co-op and conclude its equity fundraising.



Subject to the signing of the facility documentation with RBS (enabling the sale of the Welsh sites to proceed to exchange of contracts and the new £0.25 million working capital facility from RBS to be made available for drawdown) and successful completion of an equity fundraising, the Board believes these together will be sufficient to fund the Group to the point where its contract housebuilding operation is forecast to start generating net positive cash flow later this year.



The Board highlights that whilst the above would eliminate some of the immediate risks to the Group, certain specific risks would still remain, including the following:



· the forecast net cash inflows from the Group's contract housebuilding operations are either delayed or not generated in line with the Board's expectations;



· the Group's banking partners withdraw their support and choose not to renew facilities at the various expiry dates detailed above;



· Trilandium and/or Trilandium Celtic experiences financial difficulties and is unable to complete the acquisitions of the Welsh sites in line with the agreed timings; and



· the Board is unable to complete the disposal of the Group's other properties and its banking partners take enforcement action against the Group as a result.



The Board is confident that once the Group's immediate position has been stabilised, these risks would become more manageable and that, eventually, long-term solutions will be found.



Overall, the Board believes that the strategy outlined above represents the only viable means of protecting the interests of all of the Group's stakeholders. These arrangements will, in time, provide an exit route for senior lenders, prospects of long-term value creation for existing and new shareholders alike and, ultimately, a means by which a meaningful future for the Group can be secured.



For further information please contact:



Eatonfield Group plc
Tel: [phone]

Brian Corfe (Executive Chairman)



Rob Lloyd (Group Chief Executive)



Duncan Syers (Group Finance Director)






Evolution Securities Limited
Tel: [phone]

Joanne Lake/Peter Steel






Optiva Securities Limited
Tel: [phone]

Jeremy King






Threadneedle Communications
Tel: [phone]

Graham Herring/John Coles







This information is provided by RNS
The company news service from the London Stock Exchange

[bonanza grades] 11/4/2011 13:25

Looks like more sheep lining up

[waleriuszwatrobka] 11/4/2011 13:25

...TOP, yes indeed ;-)

[bonanza grades] 11/4/2011 13:24

Massive dilutive fundraising then ?

[bonanza grades] 11/4/2011 13:23

so Topliar wishes he bought at 4p

and it looks like it is worth MINUS 4p

LOL PMSL

[bonanza grades] 11/4/2011 13:22

LOL

Idiot

As discussed above, the Board is now seeking to raise equity funding to clear certain of the Group's outstanding trade creditors. The Board is currently at the advanced stages of planning an investor roadshow, expected to take place imminently. The Board believes that any offers of equity funding will be subject to finalisation of facility documentation with RBS and the Co-op. Further updates on the progress of the intended equity fundraising will be provided in due course.

[topinfo] 11/4/2011 13:20

At last Guys a positive RNS.

DJ Eatonfield Group plc Proposed sale of land assets and funding update

TIDMEFD

RNS Number : 6839E

Eatonfield Group plc

11 April 2011

11 April 2011

Eatonfield Group plc

("Eatonfield" or "the Group")

Proposed sale of land assets and funding update

Eatonfield's board of directors ("the Board") provides the following update on progress made in respect of the previously notified negotiations with its banking partners and in relation to the sale of certain of its land assets. The Board also outlines below its strategy and objectives for the Group going forward and plans for an equity fundraising. Subject to satisfaction of the outstanding conditions noted below, the Board believes that these developments and this strategy will help to prevent further deterioration in the Group's financial condition in the short-term and secure its long-term commercial viability.

Background to the Group's present position

Eatonfield has been in severe financial difficulty since the summer of 2008. Between that date and the autumn of 2009, the Group was adversely affected by falling demand for residential property, which in turn reduced sales of housing units and land and therefore its ability to service its net debt. Eatonfield also suffered from falling loan to value ratios reducing the Group's ability to raise additional debt finance and commercial property market conditions also worsened significantly during this period.

Market conditions remained difficult throughout 2010. The Group's cash flows deteriorated further as a result and equity of approximately GBP1.2 million was raised during 2010 to provide Eatonfield with sufficient working capital to continue trading.

Brian Corfe and Duncan Syers joined the Board in June 2010 as Executive Chairman and Group Finance Director respectively. Since then, Mr Corfe and Mr Syers have been working with Rob Lloyd (Group Chief Executive) and other members of the senior management team to address the Group's financial difficulties. The Board's focus has been on identifying a strategy to achieve a substantial reduction in the Group's net debt and provide a stable platform for its future development.

The Board is pleased to announce that, subject to satisfaction of the conditions noted below, the first part of this strategy is now almost complete, in summary through the agreement of:

-- the proposed exchange of contracts, to take place shortly, for the sale of a significant proportion of the Group's residential land assets to Trilandium Celtic LLP ("Trilandium Celtic"), raising net proceeds between the date of exchange and 30 September 2014 of approximately GBP6.65 million. The assets comprise residential land at seven sites in Wales.

-- Heads of terms for the sale of part of a site at Birkwood near Glasgow to Trilandium LLP ("Trilandium") for approximately GBP2.75 million.

-- subject to exchange of contracts over the Welsh sites, follow-on housebuilding contracts with Trilandium Celtic over 243 units on these sites to commence imminently, with the prospect of similar contracts with Trilandium over 76 residential units at Birkwood, providing the Group with a profitable and sustainable contracting business capable of future growth; and

-- proposed revised facility arrangements with certain of the Group's banks, such facilities having, in the Board's view, realistic capital repayment targets, covenant tests and fee charging structures, thus strengthening the Group's financial position.

The sale of the Welsh sites has credit approval from Royal Bank of Scotland plc ("RBS"), which holds a first charge over those sites. The facility documentation is now in agreed form and expected to be formally signed within a matter of days. Once this process is complete, the Board will be in a position to exchange contracts with Trilandium Celtic. The sale of Birkwood will require the consent of all banks that hold charges over the site.

The total net proceeds of GBP9.4 million from the sale of the Welsh sites and Birkwood will be applied to reducing the Group's net debt, which stood at GBP26.9 million as at 31 December 2010. Total debt outstanding over the Welsh sites and Birkwood was GBP6.65 million and GBP2.75 million respectively at 31 December 2010.

As part of the arrangements for the sale, RBS has also agreed to provide the Group with a GBP0.25 million working capital facility to support the development of the contract housebuilding operation. As discussed below, the Board also plans to raise further funds through the issue of new equity, the majority of which will be used to clear certain of the Group's outstanding trade creditors.

The Transaction

Overview

Subject to the formal signing of the facility documentation with RBS, as described above, Eatonfield expects shortly to be in a position to exchange contracts for the sale of the Welsh sites. The land assets comprise 243 housing plots. The plots will be packaged into a number of groups and sold in a series of separate transactions.

As part of these arrangements, the Group has agreed to build houses for Trilandium Celtic on the Welsh sites. Pursuant to the sale of the Welsh sites, Trilandium Celtic will be required to make cash payments to Eatonfield in line with an agreed schedule between the date of exchange of contracts and 30 September 2014. Legal ownership of the plots making up the Welsh sites will only transfer to Trilandium Celtic once the relevant cash payments have been received by the Group.

Trilandium and Trilandium Celtic

Trilandium and Trilandium Celtic are specialist residential developers established in 2009 as limited liability partnerships and are based in Leeds. Their business models are to acquire rights to build on residential land without committing substantial capital to acquire the land in advance.

Trilandium and Trilandium Celtic have provided confirmation to the Board that they have access to development funding to support the housebuilding contracts and also has its own cash resources to finance the initial land purchase payments.

The Welsh Sites

Once exchange of contracts has taken place, the sale of the Welsh sites will become unconditional in all but two respects:

-- the granting of detailed planning permission on three of the Welsh sites; and

-- the Board identifying a solution to issues regarding ground conditions at Cwmanaman Road (one of the Welsh sites).

The Board is confident that the detailed planning permission required will be obtained, thereby enabling completion of the sale of the three sites referred to above to take place in accordance with the schedule agreed with Trilandium Celtic. The Board is also confident that a solution to the issue regarding ground conditions will be identified. The Board has made appropriate assumptions in respect of these matters regarding the timing of the related cash flows in the Group's financial forecasts.

Subject to these conditions being satisfied, the payments relating to the Welsh sites (comprising plots for 243 new houses for a total gross consideration of GBP6.6 million) due from Trilandium Celtic are expected to be received as set out below:

-- GBP1.0 million during the period from the date of exchange of contracts to 31 December 2011, of which GBP0.5 million will be paid during April and May 2011;

-- GBP1.7 million during 2012;

-- GBP2.0 million during 2013; and

-- GBP1.9 million in the nine month period to 30 September 2014.

Birkwood

Heads of terms have been agreed by the Board with Trilandium for the sale of part of a site at Birkwood. The land to be sold will be subject to similar arrangements to those for the Welsh sites, with follow-on housebuilding contracts. In summary, the Board has agreed to sell 76 housing plots for a total gross consideration of GBP2.8 million, to be paid as follows:

-- GBP0.7 million during the period from the date of exchange of contracts to the date ending twelve months thereafter;

-- GBP1.0 million during the period between the first and second anniversaries of date of exchange of contracts; and

-- GBP1.1 million during the period between the second and third anniversaries of date of exchange of contracts.

Any future exchange of contracts on Birkwood will be dependent on the granting of detailed planning permission and the consent of all banks that hold charges over the site.

Contract housebuilding business

Eatonfield has proven expertise in housebuilding, having completed the construction and sale of 43 houses for Pembrokeshire Housing Association, four for Tai Cantref Housing Association and 16 for Jenard Properties Limited ("Jenard") over the last 15 months, realising revenues and gross profits of GBP4.9 million and GBP0.45 million respectively. Brian Corfe has substantial experience of the housebuilding industry and intends to grow the Group's business in this area.

Eatonfield and Trilandium Celtic have agreed, negotiated contracts, for the Group to build 243 houses on the Welsh sites with an aggregate contract value for Eatonfield of approximately GBP25 million.

In respect of Birkwood, Eatonfield and Trilandium have agreed negotiated contracts to build 76 out of a possible 165 houses upon the granting of planning permission. Eatonfield may also have the opportunity in the future to build houses on the 89 remaining plots not subject to these arrangements.

The building of the houses on five of the Welsh sites and at Birkwood is expected to take between three and five years to complete. The housebuilding at the remaining two Welsh sites may take less time.

In addition to these arrangements with Trilandium and Trilandium Celtic, the Group has, subject to contract, agreed to build out for Jenard the remaining plots on its sites at Hook in Haverfordwest and North Park in Cardigan.

Future strategy - summary

(MORE TO FOLLOW) Dow Jones Newswires

11-04-11 1217GMT

The Board is of the view that the exchange of contracts over the Welsh sites will provide the Group with a potential pipeline of future work and increase the scale of its housebuilding activities. A key long-term objective of the Board is therefore to establish a substantial and profitable contract housebuilding operation. The Board's intentions are also for the Group's land trading business to supplement (but not to the extent that it jeopardises) the core contract housebuilding operation on a case by case basis as opportunities arise.

Conclusion

The Board believes that the site sales to Trilandium and Trilandium Celtic will provide the Group with an opportunity over the short to medium-term to strengthen its balance sheet through a reduction in net borrowings. The agreement, in the first instance, to build houses on the Welsh sites and for Jenard, with the potential for similar arrangements at Birkwood will also provide the Group with future income streams and cash flow and thus provide it with the platform to secure its long-term commercial viability.

Bank facilities

Set out below is a summary of the facilities and loans advanced by each of the Group's banking partners, including, where relevant, a summary of the revised arrangements following recent discussions.

RBS

RBS, which holds a first charge over the Welsh sites, has approved the sale of these sites to Trilandium Celtic. RBS will, subject to the signing of facility documentation and the exchange of contracts for the sale of the Welsh sites, also extend the repayment date of loans advanced to the Group totalling GBP8.81 million, from 31 December 2010 to 31 March 2014. Of the GBP8.8 million, GBP5.2 million of the Group's revised capital and interest repayment commitments under these loans will match the anticipated timing of receipt of the proceeds from the sale of the Welsh sites between now and 31 December 2013. A further GBP1.4 million is scheduled to be received from Trilandium Celtic after the expiry of the RBS facility.

The balance of the capital and estimated future interest repayments due to RBS under these loans is approximately GBP3.2 million, which can be repaid at any time up to 31 March 2014. In this respect, RBS holds charges over two properties owned by the Group, including the freehold of Haycroft Farm, Eatonfield's Head Office, which is currently being marketed for sale. The Group intends to use the proceeds from any sale of Haycroft Farm to reduce this GBP3.2 million balance.

As described above, RBS has also agreed, subject to the signing of the facility documentation and the exchange of contracts for the sale of the Welsh sites, to provide Eatonfield with a GBP0.25 million working capital facility in support of the Group's plans to develop its contract housebuilding operation.

Allied Irish Bank plc ("AIB")

AIB has provided the Group with a GBP9.9 million facility, secured on a number of land assets including Birkwood, the Corus site at Workington, Cumbria and sites in Driffield, Yorkshire and Pen-Y-Bont, Flintshire.

As discussed above, Eatonfield is in negotiations to sell parts of Birkwood to Trilandium, with any such transaction requiring the consent of all banks that hold charges over the site. Eatonfield is also in discussions with interested parties to sell the sites at Driffield and Pen-Y-Bont, as well as investigating options to generate value from its Corus site. The repayment date of the facility with AIB has been extended as follows:

-- to 31 May 2014 in respect of the loan over Birkwood of GBP2.8 million on condition that the Trilandium payments are made direct to AIB; and

-- to 31 August 2011 in respect of the remaining loans.

The Co-operative Bank plc ("the Co-op")

The GBP4.5 million loan from the Co-op is secured by a first charge over the Group's freehold site at Ystalyfera near Swansea. The Board has, over recent months, been in active discussions with a potential buyer of part of the site. The negotiations have progressed positively and, the Board believes, are now nearing completion.

The Co-op loan was due for repayment in October 2010 and the Group has technically been in breach of the terms of the facility since that date. The Co-op, however, is supportive of the Board's plans to dispose of part of the site and the facility remains available as at the date of this announcement. Once terms have been agreed for the disposal, the Co-op will then complete its credit committee approval procedures to extend the date of repayment on the outstanding balance once the sale proceeds have been applied as a partial repayment.

Anglo Irish Bank ("Anglo")

The GBP3.3 million loan from Anglo is secured on Eatonfield's freehold property at Europa Drive in Sheffield which is being actively marketed for sale. The Board is confident that the property will be sold in due course and that the disposal proceeds will repay most if not all of the loan.

The Anglo loan was due for repayment on 29 October 2010 and the Group has technically been in breach of the terms of the loan since this date. Anglo has provided the Board with a comfort letter confirming its support of management's actions to repay the loan.

HSBC Bank plc ("HSBC")

Repayment of Eatonfield's GBP1.2 million facility with HSBC has been extended until 29 November 2011. This loan is secured on the Group's freehold properties in Mold and Buckley in Flintshire, North Wales, both of which are currently at the early stages of being marketed for sale.

Principality Building Society ("PBS")

The repayment date of the Group's GBP0.35 million facility with the PBS has been extended until 31 July 2011. The Board intends to develop houses on the site on which this loan is secured, subject to further development funding being made available by the PBS.

Equity fundraising

As discussed above, the Board is now seeking to raise equity funding to clear certain of the Group's outstanding trade creditors. The Board is currently at the advanced stages of planning an investor roadshow, expected to take place imminently. The Board believes that any offers of equity funding will be subject to finalisation of facility documentation with RBS and the Co-op. Further updates on the progress of the intended equity fundraising will be provided in due course.

Summary

As announced in the Group's half year report released on 31 March 2011, the Board expects that the Group's existing financial resources will provide it with sufficient working capital until mid April 2011 and the Group clearly remains in a very difficult financial position. The Board believes, however, that the residual funding currently available should provide the Group with sufficient time to agree facility documentation with RBS and the Co-op and conclude its equity fundraising.

Subject to the signing of the facility documentation with RBS (enabling the sale of the Welsh sites to proceed to exchange of contracts and the new GBP0.25 million working capital facility from RBS to be made available for drawdown) and successful completion of an equity fundraising, the Board believes these together will be sufficient to fund the Group to the point where its contract housebuilding operation is forecast to start generating net positive cash flow later this year.

The Board highlights that whilst the above would eliminate some of the immediate risks to the Group, certain specific risks would still remain, including the following:

-- the forecast net cash inflows from the Group's contract housebuilding operations are either delayed or not generated in line with the Board's expectations;

-- the Group's banking partners withdraw their support and choose not to renew facilities at the various expiry dates detailed above;

-- Trilandium and/or Trilandium Celtic experiences financial difficulties and is unable to complete the acquisitions of the Welsh sites in line with the agreed timings; and

-- the Board is unable to complete the disposal of the Group's other properties and its banking partners take enforcement action against the Group as a result.

The Board is confident that once the Group's immediate position has been stabilised, these risks would become more manageable and that, eventually, long-term solutions will be found.

Overall, the Board believes that the strategy outlined above represents the only viable means of protecting the interests of all of the Group's stakeholders. These arrangements will, in time, provide an exit route for senior lenders, prospects of long-term value creation for existing and new shareholders alike and, ultimately, a means by which a meaningful future for the Group can be secured.

For further information please contact:

Eatonfield Group plc Tel: [phone]
Brian Corfe (Executive Chairman)
Rob Lloyd (Group Chief Executive)
Duncan Syers (Group Finance Director)

Evolution Securities Limited Tel: [phone]

Joanne Lake/Peter Steel

Optiva Securities Limited Tel: [phone]

Jeremy King

Threadneedle Communications Tel: [phone]

Graham Herring/John Coles

This information is provided by RNS

The company news service from the London Stock Exchange

END

[maxmarilli] 11/4/2011 07:58

here we go again,this week will tell if efd will be in or out of favour...

[maxmarilli] 06/4/2011 11:25

topping up at .502,this saga should be over ,hopefully,pretty soon...