Paper Plus New Zealand is likely to go to its members for capital after breaching its banking covenants.
Its annual statements made public on the Companies Office on Tuesday, show the group made a total loss of $553,000 in the year to March 31, 2024.
The book and stationery retail co-op also declared a negative working capital of $2.2 million and said it has $2.5m of loans with the Bank of New Zealand (BNZ).
”While the group has previously operated with sufficient headroom within its facilities [loans], the net loss after tax in the current year meant that the group breached its interest cover ratio,” the retailer’s co-operative franchisor said.
An interest cover ratio, often used as a covenant, is calculated by dividing earnings by the total amount of interest expense of a company’s outstanding debt.
