BELEAGUERED luxury goods firm Waterford Wedgwood, which is relying on week-to-week forbearance from lenders to stay afloat, has told shareholders that its failure to complete a €153.7 million equity-raising programme in the autumn came in spite of contact with 200 potential investors.
At a downbeat annual general meeting, which chairman Sir Anthony O'Reilly did not attend, shareholders were told that the company made more than 50 management presentations before bringing the process to a halt last month.
Board members who addressed the meeting repeatedly stressed the weight of pressure under which the company is trying to execute a deal with the sole remaining interested party. That party, still unnamed, is currently carrying out due diligence on a possible investment outside the parameters of the equity-raising programme initiated last summer.
In the interim, the company is relying on forbearance on a review of its banking covenants in light of its failure last month to make an €8.2 million bond payment. The latest period of forbearance - in respect of a test of its covenants which is required in light of a "cross-default" triggered when the debt payment was not made - came to a close last night. As Waterford did not issue any statement after the Dublin market closed, a statement is likely at 7am on Monday before the market reopens.
"Failure to obtain further forbearance from the senior lenders in respect of the conditions . . . would compromise the group's ability to continue as a going concern," chief financial officer Anthony Jones told the agm.
Non-executive director Redmond O'Donoghue, who chaired the meeting, said any optimism for Waterford must be tempered by knowledge of the "truly abysmal" market conditions in which the firm is trying to raise new investment.
Sir Anthony and his brother-in-law and deputy chairman Peter Gouldandris were unable to attend because they were both in the US on "urgent" Waterford business, Mr O'Donoghue said. The two men, who have together invested some €400 million, are likely to see their combined stake in the firm drop to 30 per cent at most from 60 per cent in the investment plan under discussion.
Chief executive David Sculley pointed to "some signs of promise" in Christmas sales in US department stores in recent days, but said "it's certainly tough out there". The firm has already noted that October revenues dropped 19 per cent while November revenues dropped 15 per cent.
All resolutions were carried. Attendees laughed loudly at the very end of the meeting when one shareholder asked when Waterford planned to restore its dividend. Mr Jones, who said the company was not currently making an operating profit, said it would 2012 "at the earliest" in current plans before there would be any prospect of a dividend.
