Feltex shares slump 29 per cent after fresh blow

Shares in Feltex Carpets plunged 29 per cent today after the troubled carpet maker announced fresh bad news, then lifted Monday's share trading suspension.

The company said restructuring talks were continuing but the value of any deal would be materially below that at which the shares last traded.

Feltex had been on 21 cents on Monday when trading was suspended, pending the outcome of the restructuring talks. Today, they plunged to 15c cents when they resumed trading.

The Feltex board said it was continuing with talks for a potential restructuring of the company.

"The board advises there is currently no certainty that a deal will be concluded nor of the terms on which any such deal would be struck," it said.

"However if an agreement was concluded, the value to shareholders arising from that restructuring would be materially below that at which the shares last traded."

The Herald yesterday reported two bidders were said to be showing interest in coming to Feltex's aid.

It quoted industry sources as saying the bidders were vying to put Feltex back on a sound financial footing.

The names of the potential buyers were not known, although it was suggested one was Australian carpet-maker Godfrey Hirst, which last year was rebuffed when it suggested a merger with Feltex.

Feltex, with debts of $129 million and a market capitalisation of about $33 million, has been seeking a cornerstone investor.

Last month it revealed it had breached its banking loan terms and needed a fresh equity injection.

Feltex had said it hoped to receive $19 million from asset sales during the first half of the June 2007 year. Analysts estimated it needed to raise another $30 million.

Feltex shares have traded between 17c and 64c over the past 12 months.

- NZPA