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IRG Breaches Covenants, Needs $500,000, In Talks With Bankers

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Aug 5 NZPA - Investment adviser Investment Research Group (IRG) has breached its banking covenants and needs to raise about $500,000.

The company was negotiating with its bankers, who had advised they did not propose to take action at this time, IRG said.

Yesterday sharemarket operator NZX warned that IRG's annual report was late.

If the report was not issued by next Monday, trading in the company's securities would be suspended from Tuesday, NZX said.

Today the company, headed by Brent King, said accounts had been prepared and their audit substantially completed, but a few outstanding matters remained to be clarified.

The audit was expected to be finished and the accounts filed with NZX by the end of this week, or early next week, IRG said.

The company's bankers had advised that in terms of the latest accounts the company was in breach of its banking covenants in respect of shareholders funds and interest cover for the year to the end of March.

The situation had arisen in large part due to writedowns for the year to the end of March, IRG said.

"Since balance date, the company has raised additional capital and sold assets. The company requires approximately $500,000 of additional capital to remedy the breach of its shareholders funds covenant, and is trading profitably and is not in breach of its interest cover ratio in respect of the current financial year."

Options for raising the additional capital needed were being reviewed.

"The company has been advised by its bankers that they do not propose to take action at this time having regard for the fact that company representatives have entered into negotiations with the bank," IRG said.

The bank wanted proposals from the company by Monday, and the company intended having further talks with the bank with a view to making the proposals by then.

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