Lamont Holdings has announced a £28 million sterling (€44.25 million) financial restructuring and a £1.3 million placing and open offer aimed at restoring the troubled textiles group to financial health. The group, whose business is now based in Britain and which reported a loss of £12.7 million for last year, said it intended to retain and improve its two remaining textiles businesses, BFF and Alexander Drew.

In a bid to cut costs, the company also plans to delist from the London and Irish Stock Exchanges. It will transfer to Britain's Alternative Investment Market (AIM), a listing more appropriate to its size, it said.

The restructuring will ease Lamont's heavy debt burden by converting part of its debt into equity. Around £15.3 million of the group's existing debt and unpaid interest will be converted into equity and non-interest bearing loan stock, leaving it with borrowings of £12.6 million.

As a result of the restructuring, the group's banks will be left with ordinary shares representing 9.2 per cent of the company after completion of the placing and open offer of 65 million new shares. The shares will be offered at a price of two pence per share, a discount of 65 per cent to the price at which they were trading before they were suspended on January 24th.

The shares fell to 2½p when they resumed trading in London yesterday from their pre-suspension level of 5¾p.

Under the terms of the placing, some 52 per cent of the new ordinary shares will be offered to a group made up of three non-executive directors of the company.

Lord Rathcavan, who already owns 0.9 per cent of the company, and Mr Ronnie Wilson and Mr Pierce Casey, who jointly control 15.1 per cent of Lamont through Castlemere, the company's largest shareholder, will see their stake in the group rise to between 36.5 per cent and 63.6 per cent of Lamont, depending on the uptake of the open offer.

Although their combined shareholding will be above the level at which a group of persons acting in concert is required to make a general offer for the company, Lamont has secured the necessary regulatory approval to waive their obligation to make a bid.

Following the refinancing, Mr Casey, who has been a non-executive director of the company since March 1999, will become a non-executive chairman of Lamont.

Meanwhile, ordinary shareholders will be given the opportunity to subscribe for around 48 per cent of the shares under the open offer on the basis of five new shares for every four held.

The £950,000 net proceeds of the placing and open offer will be used to repay a bridge facility of £700,000 and to fund working capital.

The company, headed by a new management team under chief executive Mr Bill Gleave, will focus on its two existing businesses. These are Somerset-based BFF and Rochdale-based Alexander Drew, a woven fabric printer.