Personal care and cosmetic products group IWP International said it is in refinancing talks with its lenders as it expects to breach covenants of its current loan facilities before the end of these talks due to difficult trading conditions particularly in the UK market.
The lenders are aware of this matter and it forms part of the refinancing negotiations, which have commenced in anticipation of the expiry of facilities on March 31st 2006.
The distributor and manufacturer of household goods and textiles remains confident of the continued support of its lenders and is aiming to complete these discussions as quickly as possible.
In the event that the company is required to repay its borrowings earlier than anticipated, which could arise as a result of covenant breaches, an additional amount of around €16 million could become payable, it said.
While it expects the results for the year to March 31st 2005 to be ahead of last year, the group believes that market expectations for the year to March 31 2006 are unlikely to be achieved, it said in a trading statement.
IWP added it believes that operating performance this year will continue to show progress. The savings arising from the closing of the Dublin Head Office will flow through in the year to 2007.
The company plans to publish its preliminary results for the year to March2005 towards the end of July together with a further refinancing update.