BRUSSELS, April 3 (Reuters) - Belgium-based television services company Alfacam Group said on Wednesday that its bank lenders had decided to cancel its credit lines, leaving it scrambling to find a new investor.
Alfacam, which was granted creditor protection in October, said in a statement that its banks had decided not to extend suspension of debt repayments beyond March 31.
The provider of broadcast services, TV studios and Europe’s largest fleet of outside-broadcast vans signed a memorandum of understanding in December with its banks and Indian family-owned conglomerate Hinduja Group.
The preliminary deal was to lead to a 24 million euro ($31 million) credit facility and Hinduja providing a 6 million euro equity injection for Alfacam, which breached its financial covenants a year ago.
Alfacom said in December that the 24 million euro credit facility would cover almost all of its debt.
The size of the stake Hinduja would take is under discussion, though Alfacam’s market capitalisation is less than 7 million euros after the shares tumbled 23 percent to 0.76 euros on Wednesday.
Alfacam said on Wednesday that it is continuing discussions with Hinduja and other potential investors. Otherwise, it’s business as usual, with coverage of Belgian cycling on Wednesday and MotoGP in Qatar at the weekend, a spokesman added.
The Belgian company sought a three-month extension of creditor protection on Jan. 25, saying the time was needed to allow Hinduja to carry out due diligence. A court granted this the following month, giving it protection until May 5 with a request for the submission of a restructuring plan by April 15.
Alfacam’s net assets dropped last year to less than half of the value of its issued capital, requiring it to hold a meeting of shareholders to vote on dissolving the company or backing its proposed remedies. That meeting is due on April 12. ($1 = 0.7789 euros) (Reporting by Philip Blenkinsop; Editing by David Goodman)