Doncasters seeks funds to cut debt

Doncasters began fund-raising in the US last week to help pay off debt incurred last year after the acquisition of British engineering firm Triplex Lloyd. Doncasters plans to cut its debt from £120m to about £78.8m. The company, which is listed on the New York Stock Exchange, says it wants to cut its debt-to-equity ratio […]

Doncasters began fund-raising in the US last week to help pay off debt incurred last year after the acquisition of British engineering firm Triplex Lloyd.

Doncasters plans to cut its debt from £120m to about £78.8m. The company, which is listed on the New York Stock Exchange, says it wants to cut its debt-to-equity ratio from 62% to 35% within months.

Finance director Mike Nicholas said: ‘This offering and our strong cash flow means we should get within reach of that target by about the end of the year.’

Chief executive Ian Dillamore said Triplex Lloyd, bought for £194m last December, had bedded down well. Doncasters is focusing on Triplex Lloyd’s specialist turbines operations, having sold the automotive castings and property activities last month to a management buyout team.

The closure of Triplex’s West Midland headquarters and the integration of the two firms should save about £2.9m a year, Dillamore said. ‘We are looking at other opportunities for reducing costs,’ he added.

He said aerospace demand was strong and predicted a high level of business for the next few years.

Doncasters is the world’s largest manufacturer of exhaust nozzles, supplying components for the Boeing 737 and the Airbus A320. It is also a big supplier of turbines to Rolls-Royce, now its biggest customer.

Dillamore said Doncasters’ US listing had not achieved the significantly better rating he had expected, compared with some UK engineering rivals. But US analysts understood the firm better and know ‘where we’re coming from’.

Dillamore was dismissive of rivals’ complaints about high interest rates: ‘We don’t like [them] any more than anyone else. But manufacturers’ responsibility should be to drive productivity, not squeal about the pound.’