Waterford Wedgwood has failed to meet the deadline set by bankers for putting in place a high-yield bond or other capital markets instrument to raise €190 million.
In September, the bankers, which include Royal Bank of Scotland and Bank of Ireland, told the luxury goods company to "actively pursue and not withdraw" from discussions in respect of the proposed bond issue by October 29th.
The 12 banks said the waivers over its €360 million debts would be terminated if progress on the bond was not completed by today.
Waterford Wedgwood would not comment on the matter yesterday, but market sources have suggested that negotiations about the €190 million bond are continuing and that the banks have not moved to cancel the waivers.
This is the second deadline the ceramics and crystalware company has missed in the past two months. It was due to conclude its refinancing arrangements with the banks by the end of September but this has now been extended until November 30th, 2003.
The banks have stipulated that the company must provide them with weekly updates on its endeavours to raise €190 million.
In documents filed to the US Securities and Exchange Commission this month, Waterford Wedgwood signalled that it 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.
If it succeeds in raising €190 million, this money will be used to pay off some of its debt. Some market sources expect an announcement on a possible bond issue and new debt facilities within the next couple of weeks.
Mr Peter Horgan, an analyst at Goodbody Stockbrokers, said there was still a lot of refinancing risk in the stock, and said investors were showing no appetite for the shares until the refinancing was in place.
In the longer term, the company may undertake a rights issue to raise further equity from investors.
Its banks are now in a very powerful position and are dictating terms and policies that affect the business and its shareholders.
As part of the last debt-waiver, the banks insisted that Waterford Wedgwood should not pay an interim dividend to its shareholders for the financial year ending on March 31st 2004 without their prior consent.
The banks have also stipulated that the total final dividend paid by the company for the financial year which ended in March 31st last should not exceed 1.2c per share - the equivalent of €9.4 million.
The company will hope to take advantage of the low interest rate environment to market the bond successfully.
Addressing shareholders at its annual general meeting in July, Waterford Wedgwood chairman, Sir Anthony O'Reilly, said this was a unique period in which to structure long and short-term balance sheet obligations very effectively.
