Postie Plus warns of further potential breaches of banking covenants

Wednesday 5th December 2012

Postie Plus Group, the retailer forced to renegotiate terms of its loans with Bank of New Zealand in October, says it has identified further potential covenant breaches and will be back in talks with its lender.

"Although it is not clear to PPGL whether breaches will in fact occur, the company will advise the BNZ and discuss the bank's requirements for the relevant periods," the Christchurch-based company said in a statement. The potential breaches are for the months of November as well as January and April next year, it said.

According to the company's latest annual report, Postie Plus had secured bank loans of about $9.76 million as at Aug. 5 at an average interest rate of 5.15 percent. Notes to the accounts show the company didn't meet its interest to ebit ratio covenant of 1.5 times for the rolling 12 months to April 2012 though it was in compliance with proprietorship and liquidity covenants.

Postie Plus got a waiver in May of this year but the bank at that time reserved its rights pending an expected return to compliance.

In September, the company reported an annual net loss of $183,000 including one-off restructuring costs. The normalised full-year net profit was $493,000.

The shares last traded at 24 cents, valuing the company at $9.2 million, and have declined 12 percent this year.

BusinessDesk.co.nz

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