• Text size      
  • Send this article to a friend
  • Print this article

Pawnbroker Albemarle & Bond abandons sale plan

Pawnbroker Albemarle & Bond has abandoned an attempt to sell itself and admitted its future prospects look bleak after lenders gave it until the end of March to come up with a last-minute rescue solution.

Beleaguered investors were told: "Depending on the final outcome, there may be limited value attributable to the ordinary shares."

Analysts said it looked likely that the company would go into administration.

Plunging gold prices and competition have left the Reading-based group struggling with losses and overstretched finances, resulting in it putting itself up for sale last month.

The company said it received a number of expressions of interest including from Jon Moulton's Better Capital. It was also reported that rival pawnbroker H&T was considering a bid.

Other potential buyers for the group, which includes Herbert Brown jewellery and pawnbroking stores, were said to have included its biggest shareholder EZ Corp, the US pawnbroking giant, as well as US fund Apollo Global Management.

But Albemarle received an unwelcome present when it said on Christmas Eve that Better Capital had pulled out.

Today, it said that none of the proposals it had received "were deemed to represent a fair value for the company" and it had decided to terminate the formal sale process with immediate effect.

In a statement, it said it had been given a further reprieve by its lenders until March 31 while the board "continues to explore alternative options to maximise value for all stakeholders".

Shares plunged by half to under 10p, valuing the company at £5.3 million. They had been worth 404p in July 2011.

Albemarle warned recently that earnings would be significantly below expectations and admitted it had resorted to melting down gold jewellery stocks to raise cash. It has reduced the size of its estate to under 200 sites, having closed its pop-up gold buying stores.

There has also been a mass exodus of board directors, with five of its six non-executives quitting at the start of December.

N+1 Singer analyst Andrew Watson said: "The failure to secure a successful transaction means that it is likely that the business will go into administration at the end of March, excluding a last minute solution.

"There is limited value remaining to shareholders."

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

208563