Shares in SciSys, one of the area's largest specialist IT firms, rose today after it said it had resolved a potentially damaging funding crisis.
In June the Chippenham-headquartered firm, which works with blue-chip clients including Government departments, the BBC and the European Space Agency, warned it was at risk of breaching its banking covenants in August.
Within hours of that announcement SciSys’ shares had tumbled by 38%, wiping millions off its stock market value, despite the firm’s insistence that was its banks were being supportive. 
Today the firm said its “constructive consultation” with the banks – which it has not named – had resulted in a successful outcome.
SciSys, which employs 450 staff across its offices in Chippenham, Bristol, Leicester and Reading and two in Germany, develops complex IT projects in sectors such as space, defence and media.
In a statement to the London Stock Exchange this morning, the firm said the covenants tested in August related to a loan from the group’s principal UK bankers to part-fund its £3.2m acquisition of Xibis last December.
“The relevant bank has waived the 30 June 2015 breaches and has agreed revised covenant thresholds for the second half of 2015 and 2016, providing the group with sufficient headroom to support trading in line with the board’s current expectations,” it said.
It added that its other UK bank, which provided loan finance for the acquisition of the freehold of its Chippenham headquarters in 2011, had confirmed that, subject to it achieving earnings of at least £500,000 in the year to December 31, it would issue a letter of waiver when its covenants were tested when its annual accounts were published.
The board said it foresaw no issue in meeting this threshold.
Chairman Mike Love, pictured above, said: “The board is pleased that its UK banks have confirmed their position and continue to be very supportive of the business.”
SciSys shares rose 3.16% – or 2p – this morning to stand at 66p at lunchtime.
