The chief executive of Maidstone-based Towergate has moved to halt rumours it has breached banking covenants.

Andy Homer confirmed reports that Towergate is renegotiating its banking covenants - the terms and arrangements of loans - but said this was a routine "fine-tuning" process. He said a new large acquisition would be announced soon.

"For the sake of clarity and certainty, Towergate has not and is not in breach of its banking covenants. That is a matter of fact," he said in a statement to the Insurance Times.

"I can confirm that we are in advanced negotiations with our lenders regarding fine tuning our banking facilities in line with our latest plans. This is a process we regularly undertake and we expect a successful conclusion will soon be reached.

"Towergate and our banking partners see this as a market of great opportunity since we see less competition for acquisition because of the state of the debt and banking market and, in addition, we believe an improvement in the rating cycle is imminent.

"It is expected that we will announce our largest acquisition of 2008 shortly, still leaving us with a war chest of over £40million to deploy before the year end if we so choose."

Mr Homer was responding to reports that Towergate was renegotiating its covenants because it had not been able to make planned acquisitions as quickly as expected and earnings had been slower to come through as a result.