GAM reschedules debt and plans Panama and Peru openings

Spanish rental company GAM has negotiated a new schedule of debt repayment with its lenders to adjust to current business conditions. The company's revenues fell 25% to €143 million in the first half of the year.

The new repayment schedule will defer repayments scheduled for the second half of this year as well as future repayments and represents a total deferment of €152 million. The company's net debt is €569.8 million. GAM said further negotiations with lenders - who together represent 75% of GAM's total debt - would see rescheduling of the remainder of its debt.

GAM said; "This new structure will bring about a stabilisation in company debt repayments and permit the implementation of its business plan without a substantial rise in the financial cost given that it will be based on a single tranche representing 30% of total company debt."

The company continues to trim costs - €15.1 million in savings in the first half of the year - and accelerate its international expansion. GAM said its international businesses grew by 24% in the six months and that it planned to establish rental operations in Peru and Panama before the end of the year. Last year it started renting in Brazil and Mexico and it already operates in Portugal, Poland, Romania and Bulgaria. It has also established a rental joint venture in the Middle East.

Sales in the first six months of 2009 were €143 million, 25% down from the same period in 2008. EBITDA (earnings before interest, tax, depreciation and amortization) was €43.3 million.

GAM said its international focus was on areas with major infrastructure investment; where rental is not well established; and in support of Spanish contractors operating internationally.

The company said there was evidence that the Spanish construction market was stabilising; "Various indicators show, that particularly in the months of May and June, overall activity is beginning to show signs of stabilising. In civil works, the company continues to demonstrate is leading position in the market".