WATERFORD WEDGWOOD’S lenders have granted a reprieve to the beleaguered luxury goods firm, extending for another week their forbearance on a review of its banking covenants for a second time since the business failed to make an €8.2 million bond payment almost a fortnight ago.

At the same time, Waterford has indicated that discussions about the new investment required to keep the company afloat have narrowed to the point where it is now speaking with only one party.

Although Waterford said eight days ago that it was in talks with “interested institutional investors”, the company said in a statement last night that ongoing discussions “with an interested institutional investor” and its senior lenders continued to be advanced.

In theory at least, the departure of any other interested investors would greatly strengthen the hand of the remaining party.

An alternative possibility is that the company has granted exclusivity to one party on the basis of the terms they are offering.

The 60 per cent stake in Waterford jointly held by Sir Anthony O’Reilly and his brother-in-law Peter Goulandris is likely to drop to 30 per cent or below if these efforts to secure the investment succeed, it is understood.

The forbearance of Waterford’s lenders in respect of a test of its covenants is required in light of a “cross-default” triggered when the debt payment was not made last Monday week.