F&P Appliances in talks to extend $80m banking facility

Thursday 23rd April 2009

Fisher & Paykel Appliances, the embattled whiteware manufacturer, told the stock exchange it’s in discussions over its refinancing arrangements following reports it had extended its funding facility for two months.

The company secured an $80 million short-term extension to its bank arrangements which comes due on April 30 from a syndicate of six banks led by the Australia & New Zealand Banking Group and Bank of New Zealand. The New Zealand Herald reported this deadline has been extended by two months.

“The interim facility contemplated that its term may need to be extended,” said managing director John Bongard in a statement to the exchange. This “will be repaid from the proceeds of a refinancing of the total bank debt of the Appliances Group,” he said.

About 50 staff will be axed from its New Zealand and Mexico offices in the next few months as the economic downturn continues to bite on the company’s profit margins, which have contracted amid the global slump which sapped demand for high-end appliances while increased competition spurred price cuts.

The manufacturer agreed to a 35-hour working week at its Auckland plant in a bid to save jobs last month, and was the first company to the government’s nine-day working fortnight scheme, gaining a state subsidy to make up the difference to a 40-hour working week.

The company’s stock rose 2.3% at 45 cents on the NZX 50 Index this morning after slumping 67% in the year-to-date after investors fled the company when it announced it was in breach of its bank covenants and had to negotiate the refinancing of its group debt.

Businesswire.co.nz

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