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Bad debts threaten High-Point Rendel

CONSULTANT HIGH-POINT RENDEL said this week that it was in danger of breaching its overdraft limit because it was having difficulty recovering unpaid debts.

The company said that senior managers had recently put their own money into the firm to convince its bank to maintain support.

High-Point increased pretax losses from £1.3M to £2.5M in the year to 31 July, according to results published this week.

Cashflow problems resulting from a disputed payment in the Middle East have pushed the firm close to its overdraft limit.

The consultant's overdraft is running at £3.8M, close to its agreed £4.2M limit. It has also used up all of its £1.5M loan facility. The overdraft facility is due for renewal on 28 February.

The company expects to resolve the dispute over its Middle East contract soon, leading to a payment for extra works carried out. Savings from a rationalisation programme are also expected to kick in soon.

But its financial situation remains precarious. High Point warned that even if its banking facilities were renewed on the same terms, it was unclear whether the company would be able to operate within the same borrowing limits.

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