October 10, 2019 / 6:53 AM / 2 months ago

Low & Bonar flags risk of failing financial agreements if tested

Oct 10 (Reuters) - UK-based polymer products maker Low & Bonar on Thursday flagged tough trading conditions in the third quarter and warned that it would not be able to comply with its financial agreements if they were tested in May.

Low & Bonar said it had engaged with its lenders as a result of trading challenges, deterioration in outlook and lesser flexibility in managing supplier credit terms.

Changes to financial agreements were completed and financial covenants, which were due to be tested at the end of November, were waived off to help the company move ahead with its turnaround plan and takeover by FV Beteiligungs-GmbH.

If the takeover offer were to lapse before or after Nov. 30, the covenants would be reinstated and tested, Low & Bonar said, adding that there is a significant risk that should the financial covenants be tested, the company would not be able to comply. (Reporting by Samantha Machado and Noor Zainab Hussain in Bengaluru, Editing by Sherry Jacob-Phillips)

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