The Waterford Wedgwood share price dropped almost 14 per cent yesterday morning but rallied later in the day to finish down 10 per cent.The share price dropped to 26 cents from 29 cent.
The share price movement is thought to have been caused by media reports and comment concerning a Securities and Exchange Commission (SEC) filing by the company which contained details of its continuing debt restructuring efforts.
The facility being negotiated is likely is involve more than €400 million.
Market analysts said they believed the share fall could have been caused by a "knee-jerk reaction" to the news that the banks had secured a number of conditions associated with the provision of short-term financing pending the conclusion of longer term debt arrangements.
Among the conditions is one that no dividend will be paid by the company without the approval of the banks.
However, analysts say the longer term debt arrangements would be put in place before the issue of paying a dividend arose, and so the condition would have no effect as it would be dropped once the longer term arrangements were put in place.
Ms Niamh Brodie of Merrion Stockbrokers, said the SEC filing indicated the company had agreed the principal terms of the renegotiation of its syndicated debt facility, with a view to having a new three-year facility in place by the end of November.
The document also indicated that the company was committed to actively pursuing discussions with regard to a high yield bond and other capital markets issue of not less than €190 million.
This money, if raised, would be used to pay off some of the company's debt.
Sources close to the company said it was pleased with the progress being made in negotiations concerning the debt and that the refinancing of the company's capital structure would be wrapped up shortly. It is understood that a share placing is not likely to form part of the company's fund-raising strategy.
In July, the company's chairman, Sir Anthony O'Reilly, said the company would try to take advantage of the low interest rate environment as Eircom had done with its bond issue.
"The bond market is at an all- time high point in its attractiveness. This is a unique period in which to structure very effectively long- and short-term balance sheet obligations," he told the company's a.g.m.
