January 14, 2020 / 8:08 AM / 5 days ago

Low & Bonar flags risk of failing financial agreements, sees lower revenue

Jan 14 (Reuters) - Low & Bonar Plc said on Tuesday it expects lower annual revenue and sounded a warning that it would be unable to comply with its financial agreements, should they be tested.

Earlier, the company had warned of tough trading conditions in the third quarter and said that it would not be able to comply with its financial agreements if they were to be tested in May.

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

The company said that if the takeover offer were to lapse by June 30, a scheduled covenant test would occur, adding that there is a significant risk that it would be unable to comply with the covenants, should they be tested.

Low & Bonar, which sources polymers and makes them into yarns, fibres and coated fabrics used in roofing, building and also automobiles, said it expects revenue from continuing operations of 317 million pounds ($411.12 million) for the year ended Nov. 30 and underlying pretax profit before amortisation to be about break-even. ($1 = 0.7711 pounds) (Reporting by Rishika Chatterjee in Bengaluru; Editing by Shailesh Kuber)

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