Banks order review of Mouchel business

Aaron Morby 12 years ago
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Consultant and outsourcing firm Mouchel has confirmed accountants from Deloitte have been brought in by its banks to review its business affairs.

The firm issued a statement on Thursday to quash speculation regarding ongoing talks over the refinancing of its £180m debt pile, which it announced in October.

Mouchel Group shares slumped 15% after the company confirmed the move.

The review is expected to focus on how the fall off in the company’s government contracts will affect future cash flow.

Its statement said: “Mouchel confirms that as part of these refinancing discussions Deloitte has been appointed by Mouchel’s lending banks with the agreement of the company to perform a limited scope review.

Mouchel continues to expect the refinancing to be completed by the time of its interim results expected in March 2011 and its banks remain supportive.”

The group’s share price fell by 30% in October when it unvelied a pre-tax loss of £14.7m as bad debts in the Middle East and redundancy costs hit the business.

Mouchel has made 400 people redundant since July on top of 800 lay-offs in 2009/10, which has seen the number of employees drop to around 10,000.

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