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Carter & Carter avoids administration as shareholders agree to increase its borrowings

Carter & Carter is still in negotiations with lenders to help it out of its mounting debt problem, with a view to announcing its full restructuring plans next month.

The training company, which has an automotive division running apprenticeships for numerous car brands, held its EGM this morning. At the meeting, shareholders voted to allow it to increase its borrowings in order to progress with restructuring, the details of which are due to be announced next month.

If the resolution had been rejected, Carter & Carter would have faced entering administration.

The group has debts which have increased by £43 million in the last 12 months, and now total £129 million. Company directors have forecast debts to increase further as extra working capital is needed, and is predicted to peak at £175 million.

The company’s board announced that Herbert Smith and DLA Piper UK legal practices have been given the go ahead to conduct an investigation into Carter & Carter’s operations. The company’s accounts for the year ended July 31, 2007, will not be released until the investigations have been completed.

The company’s interim management team, which was appointed to restructure the business, are working with a number of senior financial staff. Carter & Carter said it was making good progress with its restructuring process.

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