Business Opinion: Two very different Waterford Wedgwoods were on view last week. Which one you were meant to see depended on which side of the Atlantic you lived, writes John McManus.

Neither was a pretty sight, but the North American Waterford Wedgwood - as described in its Form 20-F filed with the Securities and Exchange Commission (SEC) last Thursday - was much less attractive than its Irish twin as described in the 2003 annual report sent to shareholders over the summer.

The difference centred on the information provided about the company's efforts to refinance its debts of €360 million. The report deals with the subject via a note on the funding position of the group in the accounts to the effect that its banks have agreed to a suspension of loan covenants - the agreements that govern the loans - pending a renegotiation before the end of the year.

There is a reasonably upbeat comment to the effect that long-term predictions "suggest adequate profitability and cash-flow to meet its financial needs and obligations".

The issue is not dealt with in detail in chairman Sir Anthony O'Reilly's statement, the report of the chief executive Mr Redmond O'Donoghue or that of group finance director, Mr Richard Barnes.

Not much to worry about there then. Well, not until you read the 20-F filed with the SEC. The restructuring is again dealt with by way of a note in the accounts on the funding position of the group. It repeats almost word for word the rather bland statement in the annual report and accounts. However, there is also a second note on the funding position, which amplifies significantly what is contained in the first note to the accounts. It states that that terms have been agreed for the restructuring, but that there is no guarantee that the deal will be done before the waivers expire.

The issue is also dealt with elsewhere in the 20-F in the section called Risk Factors. It highlights the statement: "We may not successfully renegotiate the terms of our revolving credit facility and private placement notes."

Also filed along with the 20-F were the letters from the company's banks granting the waivers and setting out the conditions under which they were given. They show that quite significant restrictions were put on the company and also that it was obliged to "actively pursue" the possibility of issuing a $190 million high-yield bond by the end of this month.

The picture that emerges from the 20-F is of a company under serious pressure from its banks and having to contemplate fairly desperate measures, such as issuing a junk bond. It is very different to the studied optimism of the annual report and accounts sent to shareholders on this side of the Atlantic. It was no surprise then that the shares fell 10 per cent on Friday after the analysts had finished gutting the 20-F document.

But before accusing Waterford Wedgwood of deliberately keeping its Irish or non-US based investors in the dark, a couple of points should be made. The first is that the company issued a statement on the news service of the Irish and London stock exchanges to the effect that the 20-F was filed and was available from its offices. The form was also filed electronically and was thus available for downloading over the internet from the SEC.

Also the annual report is dated June 4th, which is over three months ago. The letters from Waterford Wedgwood's banks granting the first round of waivers are dated June 3rd, while the letters granting a second round of waivers are dated September 29th.

It should also be taken into account that, by European standards, the sort of disclosure required by the US authorities is excessive. Along with the risk of failing to renegotiate debts, the company had to disclose risks such as:

strong competition in some markets;

failure to protect intellectual property rights;

failure to manage costs;

failure to comply with international trade regulations.

For all of the emphasis on disclosure the US is still the country that gave us Enroand a host of other major corporate frauds. Rules, no matter how draconian, will not stop a management that sets out to deceive its shareholders.

The message from Waterford Wedgwood is that the refinancing is going well and the 20-F disclosures are just belt and braces stuff to comply with US rules.

For all that investors do not like unpleasant surprises and that is what they got last week. The kindest thing that can be said is the company was naive if it thought that important information on something so significant would not come out into the open very quickly.

Equally, the decision - if it was a decision - not to advertise the fact that the information was available inevitably makes the company look like it was trying to hide something. And that never makes shareholders happy.