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BackYell in need of capital restructuring
Posted on 30th June 2009
Yell, the directories group, is gearing up to initiate talks with lenders about recapitalizing its’ £4.3bn debt load, while simultaneously warned the market that earnings would fall by almost a third in the second quarter.
The group is
hoping to renegotiate the maturity and terms of
its debt agreements, as falling sales have put it
in danger of breaching its covenants. It is
struggling as the advertising market worsens
because of the economic downturn.
It expects
revenues in the three months to June 30 to fall 11
per cent year on year, while ebita would be down
20 per cent, on a constant currencies basis.
Quarter two ending in September, historically is
one of the weakest periods for the group and
revenues are expected to be down 17 per cent with
ebitda falling by 30 per cent.
The company
is planning to start talks with the consortium
during the next week and is expected to be
complete by autumn. This is expected to be one of
the last round of talks by the Yell in an effort
to sustain itself, however has also mentioned that
it would only help maintain a 7 per cent headroom
on the company’s operations.
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