BOOKMAKER William Hill has begun crucial talks with its banks about refinancing £1.2 billion of its debt.

Talks with the company’s six main lenders – Barclays, RBS, Lloyds TSB, HSBC, Allied Irish Bank and Bank of America – have begun in recent weeks. William Hill has also appointed debt-advisory specialists, believed to be from KPMG, to assist in the discussions, which it hopes to conclude by the time of its preliminary results in February.

Investors are likely to welcome the move as fears grow that credit will be increasingly hard to come by even for the most solid of firms as the economy worsens and debt markets remain frozen.

Shares in William Hill have plunged more than 60% over the past year to 208p, largely over concerns about its debt exposure. The company is valued at £726m against debt of £1.4 billion – £1.2 billion of which matures in 2010. This is largely a legacy of a £500m deal to buy Stanley Leisure’s betting shops in 2005 and a share buyback that followed.

Nigel Parsons, analyst at Evolution, recently suggested William Hill could breach its banking covenants next year.

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