LONDON (ShareCast) - In-flight caterer Watermark has signed a seven-year deal to supply all of United Airline's international and domestic in-flight catering needs out of its Los Angeles hub
News of the deal accompanied a painful financial restructuring that will see the number of Watermark shares in issue increase by nearly six times.
Watermark, which is considering a move to Aim, will raise £7.5m through an underwritten placing at 7.5p per share, while bondholders have agreed to an early conversion of £9.3m worth of outstanding bonds and interest into equity at the same price. Bondholders will also be granted 6.2m warrants with an exercise price of 15p per share.
The money raised will pay back £2m of short-term loans. Watermark added its bankers have agreed to revise its banking covenants following the restructuring.
"'The signing of the new contract with United is proof of the benefits of our approach to the management of global supply chains in the travel industry and the de-gearing of Watermark's capital structure will position us well for future growth," chairman Stephen Yapp said.
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