BusinessBusiness RecoveryResurge helps revive paper company

Resurge helps revive paper company

Turnaround company Resurge has completed its first deal by helping to resurrect Somerset-based Moorgate Paper.

On Christmas Eve, Resurge agreed to provide the Moorgate Paper company with £500,000 worth of financing for its £2.6m acquisition of Clarence Paper Sales Limited, a company which went into receivership last November.

Moorgate obtained the further £2.1m from traditional sources of financing. The money borrowed from Resurge is fully repayable within six months with interest of up to 25%.

The deal is backed by 51% of Moorgate’s share capital and a personal guarantee from Neville Simpson, the owner and only other shareholder of the company.

Under the deal, Moorgate acquired the trade debtors of Clarence Paper, estimated at about £2m, as well as the goodwill, plant, equipment, stock and freehold premises.

Clarence was a wholly-owned subsidiary of Capital Paper Holdings and made pre-tax profits of £1.07m in the financial year to May 31, 2001.

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