IRG in talks with bank over covenant breach

Tuesday 14th September 2010

Investment Research Group (IRG), which publishes the NZ Investor Monthly magazine, is in talks with its bank over a breach of lending covenants.

The company expects to report a loss before tax from operations of about $890,000 compared to its previous estimate of a $175,000 profit. The loss reflects a write-down of the value of its databases and goodwill to comply with IFRS.

It has also written down the value of the carrying value of deferred tax assets to $473,559 from $1.59 million.

The changes “mean that IRG will be in breach of its bank covenants and is now in discussions with its bank on solutions,” managing director Brent King says.

The company’s auditors are likely to qualify its audit report on the carrying value of some assets, with their final opinion determined by the outcome of talks with the bank and the level of shareholder and director support.

King, who has put his own money into the venture to ensure it continues as a going concern, has provided a further $440,776 in advances since year end.

The company has had its shares suspended from trading this year due to the late filing of accounts. King says "unforeseen changes in personnel have made the process unacceptably drawn out and have delayed the finalisation of the accounts, annual report and notice of meeting."

Businesswire.co.nz

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