Finally the secret deal that saved Firstport has been revealed.
According to Firstport,such was the success of their turnaround that new investors in the name of Equistone decided to put their money into the company.
Of course success can be judged in many ways,but can it really be called a success if at the time of the buyout the company has a net negative valuation of £-40,105,000?
The takeover by Equistone valued Firstport at £65,345,000 made up with a combination of cash,(£49,106,000) Provision for liabilities (£12,161,000),The issue of corporate bonds (£1,496,000) and costs(£2,582,000)
The much trumpeted refinancing consist of bank loans (£64,200,000) and shareholder loans (£51,036,000).
Financing costs of £2,943,000 have been deferred.
The shareholder loans are divided up with Equistone lending £49,461,000, whilst Firstport directors including Nigel Howell puting up £1,575,000.
The Firstport directors funds represents the emegency money that has to be put into Firstport to keep it trading whilst a sale or rescue was being negotiated.
This funding from shareholders comes at a price and it is a very heavy price.
At a time when the bank rate of interest is set at 0.1% the terms of the shareholder loans to keep Firstport afloat are an astonishing 10% of the principle over a period of 10 years.
The funds that will service those loans can only come from one source and that is the unfortunate leaseholder.
