Stainless steel products company Mercer Group is considering refinancing options after breaching a banking covenant.The company told NZX that it had been advised by its bank that it was in breach of the interest cover covenant that earnings are to be no l
Stainless steel products company Mercer Group is considering refinancing options after breaching a banking covenant.
The company told NZX that it had been advised by its bank that it was in breach of the interest cover covenant that earnings are to be no less than 2.25 times the funding costs for the six month period ending December 31, 2009.
The actual achieved ratio was 1.9 times. The bank advised that it reserves its rights in respect of the breach.
The company subsequently drew down $1.5 million from Gresham Finance and used the money to reduce the bank debt.
Principal payments to non-bank lenders are on hold and interest payments are being made in compliance with loan agreements.
The company reported a $313,000 loss in the six months ended December 31.
It said today that projections prepared by management show a return to profitability in the 2011 financial year.
The company was established in Christchurch in 1882.
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