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Doubts continue over engineer Doncasters over investor debt

Auditors have again sounded the alarm over Doncasters Group, one of Britain’s oldest engineers, because of the company’s heavy debt load.
The business makes parts for aerospace, automotive and energy sectors and is owned by Dubai International Capital (DIC), the sovereign wealth fund.
DIC attempted to offload Doncasters last year but hopes of a sale this year to a Chinese buyer were torpedoed by security concerns over the group’s defence contracts.
Newly published accounts show while revenue from continuing operations rose 7.4pc to ?525.6m last year, Doncasters made a pre-tax loss of ?92.1m. Ballooning exceptional costs of ?28m came from issues like redundancies and reorganisation, legal battles, and disruption to manufacturing. Excluding these, the annual loss fell almost 40pc to ?64.1m.
Doubts continue over engineer Doncasters over investor debt

Dubai's sovereign wealth fund owns Doncasters

Credit:
Victor Romero
Doncasters had ?1.2bn of debt at the end of December including ?430m in shareholder loans from DIC. Auditors raised concerns about debt facilities held by DIC which matured in 2016 but remain unpaid with shares in Doncasters held as collateral.
PwC said this contributed to “material uncertainty” about Doncasters’ ability to continue as a going concern if DIC’s lenders called in the debt and a restructuring could not be agreed.
However, the accounts note that DIC is in “active discussions” over extending the debt’s maturity.
They add that Doncasters’ directors expect this to go ahead without any disruption to the business, though caution there is “no certainty as to DIC’s lenders’ actions”.
In April this year Doncasters sold its fasteners division for $440m (?342m). It said it would use the proceeds to cut net debt excluding shareholder loans to ?491m.
Doncasters and DIC were unavailable to comment.
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