After the upheavals of recent weeks, Cordiant Communications, the struggling advertising group, has today been given a two month deadline to get its affairs in order.
Lenders have confirmed that they will continue financing agreements until mid-July, sufficient time for management to devise a survival strategy.
“The company has now signed a definitive agreement with its lenders to provide continuing financial arrangements to July 15,” Cordiant said today in a statement.
The current crisis was precipitated by UK drinks group, Allied Domecq which terminated its deal with Cordiant at the end of April (see Cordiant Shares Nose-Dive As Major Client Walks). This was the latest in a long line of account losses and sent the ad firm’s shares tumbling on the London Stock Exchange.
Cordiant barely managed to release its end of year results on time (see Cordiant Shares Bounce Back As Short-Term Funding Is Agreed) and was thought to be a takeover target for larger advertising groups such as Publicis. The stay of execution gives the company time and space to contemplate restructuring (see Cordiant Looks For Survival Plan) and it is thought to be listening to offers for its PR agency Financial Dynamics.
“The board continues to evaluate a range of proposals for the business and is in constructive discussions with its lenders to provide long-term funding for the group,” Cordiant said.
Shares in the company were up 0.5p at 9.25p at 11am today.
