Fisher & Paykel secures $80m lifeline

Bankers have allowed whiteware manufacturer Fisher & Paykel Appliances an $80 million facility. Photo / Glenn Jeffrey

Fisher & Paykel Appliances chief executive John Bongard says an interim loan agreement with its bankers is a "huge step forward".

The whiteware maker yesterday said it had secured an $80 million facility from its bankers and negotiated a waiver of the group's debt cover ratio and interest cover ratio covenants as at March 31 for the term of the facility.

"It's a good positive step for us," said Bongard.

He said the move would allow the company to continue restructuring. It would also see the company through its peak debt level, which is expected to hit $570 million by the end of this month, giving it time to work through its total debt with banking partners.

Fisher & Paykel Appliances shocked the market last month with a trading update which revealed plunging sales figures and a big rise in its overseas debt levels because of a drop in the New Zealand dollar.

Its share price fell 35 per cents in one day and has continued to drift down since. Bongard said the agreement showed the company continued to be supported by its banking group.

"There has been a lot of goodwill from our bankers, who we have been working with closely."

That group includes the ANZ, BNZ, Westpac, HSBC, Citibank and the Commonwealth Bank of Australia.

Bongard said the company was looking at other funding arrangements but did not have anything new to announce. It was not about to announce a cornerstone shareholder.

The interim $80 million debt facility was repayable on April 30. The company expected to repay it from the proceeds of refinancing its total debt or at a later date.

The company's banks have agreed to move to joint decision-making for the term of the interim facility.

The company had also taken steps to reduce its exposure to foreign currency denominated debt since its last update on February 16. That debt had dropped by 26 million, US$28 million and 100 million Thai baht, he said.

Fisher & Paykel Appliances shares closed down 1c at 51c yesterday, down from $2.75 in May last year.

- NZPA