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Wakefield discovers past banking covenant breach, now remedied

Friday 18th November 2011

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Wakefield Health said it had discovered a past breach of the shareholders' funds covenant within its agreement with its bankers which has since been remedied.

The private hospital operator said it discovered the breach when finalising its compliance reporting to its bankers, Westpac and Bank of New Zealand, and sought a waiver which was granted by both late yesterday.

The breach arose from the way the covenant deed was drafted, the company said.

“Wakefield is currently in discussions with its bankers regarding a change in this documentation to deal with an anomaly that has emerged in relation to the inclusion of the company's investments in associates and joint venture holdings,” it said.

Wakefield's $15 million capital raising completed earlier this month to help cover the cost of its $24.2 million takeover of Norfolk Investments which owns 60 percent of the Grace Hospital in Tauranga and its purchase of 30 percent stakes in Endoscopy Auckland and Laparoscopy Auckland has remedied the breach, it said.

“Wakefield was unaware of this issue throughout the capital raising process.”

Wakefield shares closed yesterday at $4.85, up from their recent $4.60 low which was their lowest level since mid-2005. The shares have been trending lower since peaking at $10 in August 2009.

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BusinessDesk.co.nz



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