Feltex rescue progress likely today

Feltex shareholders should hear today whether Auckland businessmen Graeme and Craig Turner have convinced the company's bank, the ANZ, to support their rescue bid.

A Feltex spokesman said last night: "We would expect progress tomorrow."

The carpet maker, now more than $135 million in debt, is also due to disclose a sharp fall in full-year earnings, reflecting more than a year of battling a downturn in the carpet market.

The Turners - backed by a consortium of leading New Zealand businessmen - have agreed to inject $51 million to relieve Feltex's debt burden. The consortium will subscribe to $40 million of convertible notes and underwrite an $11 million equity cash call.

The brothers, part of the family behind the Sleepyhead bedware group, have the support of an unnamed bank. However, they have not yet received the continued support of the ANZ, which they need while new loan arrangements are put in place.

ANZ, which last week restricted Feltex from drawing on its borrowing facilities, may also decide to continue to bankroll the company.

The Feltex spokesman said: "We are meeting payments to creditors with the knowledge and the consent of the bank."

Without a waiver from the stock exchange, Feltex must report its earnings today. Broker Macquarie expects sales to fall from $300.2 million to $274.3 million, while last year's $15.1 million pretax profit will become a $11 million loss.

If Feltex does not report, it may breach an agreement with the NZX that allowed it to delay release of its earnings for 15 days longer than required under listing rules.