Company and CEO both on sick list

Feltex chief executive Peter Thomas has been forced to cut down his workload as he tries to overcome a tropical disease he caught last year holidaying in Papua New Guinea.

But Feltex chairman Tim Saunders said yesterday Thomas had maintained his day-to-day management of the carpet-maker, although he had to "manage his workload and travel more carefully than he is used to doing".

Feltex - which has struggled since it was hit by a downturn in the Australian market last year - would not disclose any more about the disease nor the extent to which Thomas was limiting his workload.

Thomas, 57, a former banker, has been criticised for not answering for Feltex's woes, and a source close to the company says Thomas has been "virtually invisible".

The carpet-maker's shares, floated in 2004 at $1.70, have plunged after several profit revisions and a warning last month that it had breached its banking agreements with the ANZ National Bank and needed more cash.

The shares hit a low of 21c just under a fortnight ago when Feltex said a potential white knight had walked away. They closed last night down 1c at 22c. .

Feltex's loan agreements require its operating profit (earnings before interest and taxes) to be 2.5 times higher than its interest expense in the year to June, and 2.75 times thereafter.

Its total debt can be no less than 3.5 times its trading profits (earnings before interest, tax, depreciation and amortisation) and its net worth had to be more than $67.5 million on June 30 and more than $70 million during the financial year to next June.

Feltex's debt of $129 million is equivalent to almost 6.3 times trading profits before reorganisation costs.

It has not disclosed its expectations for operating profits nor its net worth.

Its full-year earnings are expected in mid-August.

Observers believe there will be little left for existing shareholders even if the company can find a new investor.

Feltex's debt pile

Lender: ANZ National.
Total debt: $129 million.
Company value: $120 million*.
Requires: $60 million*.

*Estimate