Homer confirms that consolidator is not in breach of banking covenants.
Towergate chief executive Andy Homer has moved to quash rumours that the broker is in breach of its banking covenants, claiming that it is looking to boost its acquisitions war chest in defiance of market trends.
Homer confirmed that Towergate was renegotiating its banking covenants, but said: “For the sake of clarity and certainty, Towergate has not and is not in breach of its banking convenants. That is a matter of fact.”
In a statement to Insurance Times, Homer said: “I can confirm that we are in advanced negotiations with our lenders regarding fine tuning our banking facilities in line with our latest plans. This is a process we regularly undertake and we expect a successful conclusion will soon be reached.
“Towergate and our banking partners see this as a market of great opportunity, since we see less competition for acquisitions because of the state of the debt and banking market and, in addition, we believe an improvement in the rating cycle is imminent. It is expected that we will announce our largest acquisition of 2008 shortly, still leaving us with a war chest of over £40m to deploy before the year end if we so choose.”
Homer was responding to reports that Towergate was renegotiating its covenants because it had not been able to grow as quickly as expected and because of the continuing soft market.
In June, Homer said some of the group’s recent acquisitions had not grown as quickly as expected, but insisted they would deliver a strong performance.