Nuplex calls in advisers

Nuplex Industries has named three advisers to help consider the terms of its debt and the need to raise capital, and expects to them to report within days.

The maker and marketer of speciality resins and chemicals said Bancorp NZ and First NZ Capital Securities would advise it on capital raising options. McGrath Nicol would review its forecasts and current financial positions, and would advise both the company and its banks on ongoing appropriate covenants.

The company has previously said it failed to comply with a covenant requiring debt of no more than three times ebitda as at December 31.

Nuplex is required to report ebitda based on average exchange rates for the prior calendar year, while senior debt is measured at the rate at period end.

The New Zealand dollar was lower then than the average during the year, increasing the ratio. Nuplex has been talking to its banks to seek an amendment to the covenant ratio.

It said on February 26 that conditions for an amendment or waiver have not been agreed to by all parties.

Managing director John Hirst said today the company expected to receive advice from all parties in the near future.

"By bringing in an independent person it gives everyone a lot more confidence, including our own board," he said.

He said finalisation of the issue of covenants was closer than it had been at the time of the interim report.

A lot of work was going into producing the company's forecasts, particularly in the current economic environment where it was difficult to rely as heavily on history.

The company previously announced its half-year profit dropped 76 per cent to $5.96 million as demand dried up.

The 2009 interim dividend has been suspended in order to strengthen the balance sheet and repay debt.

Nuplex shares, which have been sold heavily in recent weeks, were unchanged at $1.05. They were $6.50 in March last year.

- NZPA