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Engineering group WYG plans to drum up 拢30m in equity funding to offset debts labelled as 鈥渦nsustainable鈥� by the group鈥檚 chief executive, Paul Hamer.

Under the plan, the Leeds-based firm will carry out a debt-for-equity swap with its creditors. According to Hamer (pictured), the refinancing plan is 鈥渢he final piece of the jigsaw鈥� to stabilise the company.  

鈥淚n 2009 we began a process of restructuring to get our business into the right shape,鈥� he said.

鈥淭his refinancing plan will give us the fuel to keep our company going.鈥�

David Wilton, group finance director, has already held talks with household insurers and fund managers regarding a debt-for-equity swap.   
David Brockton, an analyst at Execution Noble, believes the company鈥檚 refinancing plan will give it a platform for growth.

鈥淲YG has already successfully reduced its cost base,鈥� he said. 鈥淯nder this plan, it will clear its debt and have cash on the balance sheet, which provides a good opportunity for growth.鈥�

Last week, WYG announced a pre-tax loss of 拢28.6m for the nine months ending 31 March 2011, on revenues of half the level reported last year. The news sent the firm鈥檚 share price down a third, falling 4.17p to 8.58p.

Just two years ago the firm was on the brink of insolvency after a strategy of expansion fuelled by acquisitions unwound as a result of the recession. Since then, it has cut costs by 拢110m and released more than 50% of its staff.

WYG is planning more office closures in the UK - the group currently runs 30 offices nationwide, down from a peak of 80. However, Hamer believes future growth lies overseas - the firm鈥檚 order book stands at 拢104m for international markets, up slightly from 拢100.6m recorded in June 2010.  

鈥淲e would like to have eight main offices in the UK and a similar amount of regional offices,鈥� he said.

鈥淸Then] we will look to grow our business internationally, particularly in the Middle East and China.鈥�