The hunt for yield continues
Albemarle & Bond, the high street pawnbroker brought low by the falling price of gold, has found a new rescuer, only weeks before a moratorium on its debt covenants expires. Reports at the weekend suggested that Fortress, an American hedge fund, was in talks with lenders to take over the company’s £50 million of debt at a percentage of its face value. This would mean the fund taking control of the company. Holders of Albemarle’s equity could find themselves frozen out. In January, after talks with Better Capital, the last potential rescuer, had collapsed, Albemarle & Bond admitted that it had received no further worthwhile proposals to buy it and that there may be “limited value attributable” to the ordinary shares. A spokesman for the company declined to comment on the latest possible rescue. As the talks are said to be between Fortress and the lenders, which include Lloyds Banking Group and Barclays, the company is not officially involved, but it is believed to be in touch with events. Fortress did not respond to a request for comment. Albemarle was hit by a combination of its earlier swift expansion and the fall in the gold price, which reduced the value of jewellery held as collateral for loans. The shares, having been above 400p in 2011, ended last week worth little more than 6p. An attempt to raise £35 million by means of a rights issue failed when the biggest shareholder refused to support the move. The banks have twice agreed an extension to its borrowing covenants to avoid these being breached. The latest runs out at the end of the month. The banks are expected to roll over again rather than send the company to the wall.