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Thursday 15th September 2011 |
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Mercer Group, the unprofitable stainless steel fabricator, has gained a waiver from Westpac Banking Corp. for a breach of a banking covenant and announced a $1.3 million ‘shareholder funding facility’ with second-ranking security over its assets.
Westpac’s waiver lasts until December and the bank also provided a $300,000 increase in the company’s overdraft facility until Oct. 11, Mercer said in a statement. The company is part way through a strategic review.
The funding package “allows the company to complete the restructure and move forward with strength,” said Rodger Shepherd, who was named chief executive on Aug. 2 after former CEO Howard Milliner took up an offer to resign.
Mercer operated outside the terms of its banking covenant for much of 2010, and last year shuffled related party debts between the lending units of shareholders Allan Hubbard and Humphrey Rolleston.
Last month it said it was in talks with its lenders over its interest cover covenant “to better reflect current trading conditions.”
Shares of Mercer last traded at 7.5 cents, valuing the company at $16.4 million.
(BusinessDesk)
BusinessDesk.co.nz
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