Vaal Industrial said on Wednesday it expects to breach a debt covenant at its September measurement date and has begun discussions with its lenders.
According to the announcement, the expected breach follows a weaker second quarter in which order intake fell short of internal forecasts. The company said its net debt to EBITDA ratio is likely to exceed the covenant threshold.
Vaal Industrial said it is pursuing a combination of cost reductions and asset disposals, and that discussions with lenders were constructive. It cautioned that no agreement has been reached.
Shareholders were advised to exercise caution when dealing in the company’s securities.
