£2m grant secures bank rescue for Superglass

STRUGGLING insulation manufacturer Superglass has secured a £2 million Scottish Government grant that will be key to a financial restructuring aimed at underpinning the company’s survival.

The Stirling-based firm, which is in the process of raising £9.5m from investors, said yesterday that it had received regional selective assistance (RSA) in “an amount and on terms which are acceptable” to its lender, Clydesdale Bank.

Clydesdale has agreed to convert £12.15m of debt it is owed into convertible shares in Superglass, but only if the amount of RSA on offer was deemed sufficient to meet the company’s funding needs.

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The minimum amount required had previously been pegged at between £1.6m and £2m.

The debt-for-equity swap and share issue are now expected to proceed as planned, with Superglass due to receive cash from the fundraising at the beginning of next month.

In the meantime, Clydesdale has amended a number of terms in its banking agreement with the firm, including deferment on a capital repayment due on 30 November and the waiving of a financial covenants test that was due in August.

Superglass – which will emerge with dramatically-reduced borrowings in the region of £5.1m – has struggled through much of the downturn as sales of home insulation have slumped.

Much of this has been blamed on low demand from utility companies through the UK government’s carbon emissions reduction scheme (CERT).

Having sunk to all-time lows after a string of three profit warnings this year, shares in Superglass leapt yesterday amid relief that this potential stumbling block had been removed.

The stock added 0.25p to close at 1.88p, a rise of more than 15 per cent.

Superglass was founded in 1987 and received an £850,000 RSA grant from the then Scottish Executive in 2005. It floated on the London Stock Exchange in 2007.