TROUBLED LUXURY goods firm Waterford Wedgwood, battling to recruit new investors after conceding failure last month in a €74.1 million fundraising effort, saw its pretax loss widen to €63.2 million in the first half of its fiscal year from €49.9 million.
A drop in sales in the six months to October and significant restructuring costs contributed to the increase in the company's losses. Waterford's lenders have suspended until today a test of its banking covenants arising from its failure to make a €8.2 million debt payment due last Monday while talks with potential investors continue.
"We are currently in negotiations with a number of interested institutional investors about a possible investment in the company on terms which, if consummated, would be different to those described in the prospectus and which, more significantly, are likely to require as a precondition a comprehensive financial restructuring," said Waterford chief executive David Sculley in a results statement published after 6.30pm yesterday.
"As a result, any such investment would therefore be larger than the company's originally planned equity funding. We continue to make good progress with potential investors and currently enjoy the support of our senior lenders."
The additional funding is required to execute a new business plan, which follows numerous job cuts and plant closures as the company tries to forge a viable future for itself by shifting manufacturing to low-cost locations.
Any deal with new investors - in talks which follow Waterford's failure to complete a €153.7 million fundraising process in train since August - is likely to result in a significant dilution of the controlling interest in the firm shared by Sir Anthony O'Reilly and his brother-in-law, Peter Goulandris.
The company's net loss in the first half €74.9 million, compared with €56.7 million a year earlier, and sales fell 15 per cent to €207.6 million. "Though revenues in the first quarter were in line with the comparable prior year period, second-quarter revenues slowed, reflecting the increasingly difficult economic environment, particularly in the group's key USA, UK and Japanese markets."
Net debt at the end of the first half stood at €448.9 million.
