Murray Capital's debt exposure cut by £470m after Lloyds restructuring

DOCUMENTS to be published this week will reveal how Sir David Murray's private investment vehicle, Murray Capital, escaped exposure to £468 million worth of debt when its former parent Murray International Holdings (MIH) was restructured by its lenders, Lloyds Banking Group.

• Murray: aim is zero borrowing Picture: David Moir

According to its restated accounts for 2009, which will be sent to Companies House this week, the slimmed-down investment group with 19m worth of net assets has turned from making a 1.2m loss last year to making a small 200,000 profit in the six months since it became independent of MIH.

The company, which is run by Murray's son, David jnr, demerged from MIH in April when the group completed a 150m debt-for-equity swap.

The deal saw Lloyds raise its holding in MIH from 12 to 24 per cent, reducing the company's debt - which last year stood at 759m.

As part of MIH, Murray Capital was liable through cross-guarantees for 468m of the parent group's debt.

But now the firm, which is 100 per cent owned by the Murray family, has only 9.65m of debt.

The company has a range of investments in Scottish firms, including a 30 per cent stake in bus maker Alexander Dennis, a 75 per cent stake in Glenrothes-based fibre-optic cable manufacturer Brand-Rex and an 80 per cent stake in Capito, a Livingston-based IT services firm.

Last month the firm sold its stake in mobile phone ticketing company, Mobiqa, when the firm was acquired by NCR for an undisclosed sum.

Murray Capital estimates that the share of turnover its companies make is 110m.

Murray has curtailed ambitions to grow the firm's assets to 100m since the restructuring, although he aims to double the size of the family's investment vehicle over the next ten to 15 years.

The effect of the restructuring meant the investment firm's ready cash reserves for investment were wiped out to zero in April. But this has since grown to over 1m.

Murray said it was unlikely the firm would be buying other companies until the second half of 2011. Although the firm has traditionally mainly invested in Scottish businesses, Murray said he planned to broaden this out to seek faster-growing companies.

"We are looking at investments out of Scotland - indigenous Scottish companies are not growing," he said.

Although the firm's 10m debt - with Lloyds - has been agreed long term, Murray said he aims to pay this down. "My objective is to give the bank their money back and reduce our borrowings to nothing."