AILING agribusiness group Nufarm has appointed external advisers to assist with a possible restructure.
The Australian reports that an unexpected blowout in debt has sparked a further breach of its already tenuous banking arrangements.
The company, which has been at the mercy of its financiers since issuing a profit warning six weeks ago, is trying to finalise waiver agreements with several banks as a deadline for the rollover of more than $300 million worth of borrowings approaches.
News that debt had increased from an estimated $450m to about $620m saw Nufarm's shares dive almost 10 per cent in early trading yesterday, before recovering slightly to close 7 per cent lower at $3.59.
The blow-out has been blamed on delays in receiving payments from customers for sales made in June and July. That, in turn, has put pressure on the company's working capital levels.
"The higher-than-anticipated debt level at July 31 places the company in minor breach of its covenant relating to gearing levels," Nufarm said, adding that it continued to make progress in securing waivers for previous breaches to interest cover ratios.
Nufarm, which makes and sells farm chemicals, has bilateral lending arrangements with banks that are governed by a core financing document.
Several banks have already provided waivers, while the company is considering the terms of waiver agreements with the remainder of the group.
