Glass Firm Blows Hole

Glassmaker Pilkington is attempting to resolve a £193m hole in its balance sheet that could emerge if an offshore financing scheme unravels in March, a report has said.

Pilkington reportedly confirmed there was £193m owed to preference shareholders in a Channel Islands subsidiary as at the end of 2002, the Guardian said. Shares could be redeemed any time after March 4, Pilkington said.

The report quoted a spokesman as saying Pilkington had put in place new lines of credit with existing banks to cover about £100m of the amount.

Credit

The company was confident it can secure the additional £93m needed through new credit lines with other lenders, and a deal is expected by the end of this month, it said.

Pilkington said it could have refinanced the shares out of existing facilities, but wanted to keep some headroom, it said.

The "black hole" had deterred Japan's Nippon Sheet Glass Co. which holds a 20% stake in Pilkington, from launching a bid for the company, the Guardian said.

The preference shares were a legacy of previous managements, dating back to the 1980s when they were used to finance acquisitions, the report said.

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