F&P Appliances gains bank waiver, new $80M facility

Friday 13th March 2009

Fisher & Paykel Appliances, the manufacturer whose shares have tumbled 60% this year as profit growth stalled and debt levels rose, said it had gained waivers from its banks and agreed to a short-term NZ$80 million loan facility.

The new funding facility, which runs through April 30, will help meet the company's temporary peak funding requirements, it said in a statement. The company gained a waiver to its debt cover ratio and interest cover ratio covenants for the term of the interim facility.

The agreements buy F&P Appliances more time to negotiate with its banking syndicate to refinance all of the group's bank debt, with the aim of completing the new arrangements by the end of April. Total debt is expected to reach about $570 million by March 31.

"Our relationship with our banking syndicate is such that we have been able to move quickly with them to establish this interim facility and a structure for ongoing discussions around a restructuring of all of the debt," said chief executive John Bongard.

Profit margins at the manufacturer have contracted amid a global downturn, including a housing slump in the U.S. that's sapped demand for high-end appliances. At the same time, competition for sales has increased, spurring price cuts.

F&P Appliances have edged closer to its bank covenant thresholds as the New Zealand dollar weakened, inflation the value of its foreign currency debt at a time when global demand for appliances is falling. Since the company's Feb. 16 trading update, it has reduced debt by 26 million euros, US$28 million, and 100 million Thai baht.

Bongard said the company is considering options to strengthen its balance sheet though he hosed down speculation that the announcement of a new cornerstone investor was imminent.

Shares of F&P Appliances fell 1.9% to 51 cents today.

(Businesswire)

By Jonathan Underhill

Comments from our readers

No comments yet