The company has reached an agreement with lenders to mend the financial covenants for the current financial year.
In August Greenyard announced it was forecasting a 25% drop in profits for the 2018-19 financial year, compared to a prediction of a 10% rise on May 2.
The company’s profits have over recent months been hit by an excessively hot and dry summer, and also due to a listeria outbreak that was linked to vegetables produced at one of its Hungarian plants, which forced it to temporarily close operations. Tests have since found no Listeria monocytogenes at the facility and it has now reopened.
“For the next year, Greenyard will remain focused on deleveraging and realizing profitable internal growth,” it says.
“Greenyard has therefore reached an agreement with the lenders under its credit facilities to amend the financial covenants for the current financial year to allow Greenyard the time to gradually improve profitability through further operational improvements and the further roll-out of its strategy to build close partnerships with its customers.”
It has been agreed with the lenders under Greenyard’s credit facilities to amend the leverage covenants under the original agreement for the period ending Sept. 30 2018 and the period ending 31 March 2019.
“We are pleased to have the support of our lenders and appreciate their confidence in our company’s future,” says Geert Peeters, Greenyard’s CFO.
“Our amended financial covenants have been reset to reflect the forecasted twenty-five percent decline in REBITDA for the accounting year 2018/19 versus last year. The waiver will give us the time to demonstrate the resilience of the business and allow us to take the necessary steps in terms of cost reductions and operational efficiencies towards the further deployment of our partnership model.”