CLYDESDALE Bank is to take half of the post-tax profits generated by insulation manufacturer Superglass as part of a refinancing deal the Stirling company said is vital to avoid administration.

Superglass has asked shareholders for £12.2 million and has signed a deal with Clydesdale that could also hand the Glasgow bank a 10% stake in the company.

The arrangement, just 18 months after a previous refinancing, came as Superglass revealed it fell to a £2.9m pre-tax loss in the first half of its financial year.

Chief executive Alex McLeod insisted: "This is a good news statement. This will mean the continuation of manufacturing in Stirling and protecting as many jobs as we can."

He added: "We have put Superglass in a very strong position albeit we are doing this in a challenging market."

Superglass's shares plunged 63% or 3.63p to 2p, the price at which the new stock will be issued. This left the company, which was worth £120m on flotation in 2007, with a market value of just £1m.

Superglass blamed its plight on delays in the launch of new Government home insulation schemes and limited house building.

Asked why it needed another restructuring so soon, Mr McLeod said: "The markets are doing substantially worse than we expected.

"Basically there has been a hiatus in the market for the last three or four months and we expect that to continue going forward well through this year."

Currently Superglass owes Clydesdale £12m.

If the £12.2m fundraising is successful, £3m of this will be handed to the bank.

Clydesdale has also agreed to convert £6.5m of debt into convertible shares, which from April 30, 2015 could give it a 10% stake in the company. The remaining £2.5m facility will be repaid in a lump sum on April 30, 2018.

In the meantime, between August 31, 2014 and April 30, 2018 Clydesdale will receive 50% of Superglass's profit after tax.

The two sides have agreed that no bank covenants will apply for the next five years.

Clydesdale has also handed Superglass a £750,000 bridging facility until the £12.2m share issue is completed.

Superglass will be left £7.6m of cash to fund its recovery.

Superglass had warned in March that debt repayments of £8.2m due over the next three and a half years were "unsustainable".

"If for any reason the refinancing does not proceed, it is likely that existing shareholders' ordinary shares would have no value and the company would likely enter into administration or some other form of insolvency procedure," Superglass said.

Superglass said it has verbal commitments for the £12.2m it seeks.

Mr McLeod said: "I am very confident we will be successful in raising this money. We have got strong backing from both existing and new investors."

Its largest investor is Belfast-based family firm W&R Barnett which built its stake to 22.3% in January. Irish building industry veteran Michael Chadwick has an 11.2% holding.

Superglass employs 170 people.

"We have committed to protecting of many of these jobs as we possibly can," Mr McLeod said.

He insisted that the long-term investment case for Superglass is sound due to the number of under-insulated homes and the long-term picture for housebuilding in the UK.

The latest development comes 18 months after it raised £9.5m from investors at 20p a share, took a £2m grant from the Scottish Government and had Clydesdale Bank convert £12.15m of debt into convertible shares exercised at prices of between 70p and 90p a share.

Superglass recently completed modernisation of a second production line as part of a £7.5m upgrade.

The company believes it has stripped £5m from running costs and developed a better quality product more suitable for export.