Apple distributor Renaissance has revealed it was in breach of bank credit conditions in September this year, and is currently operating thanks to a short-term loan that expires in May 2012.
Announcing its annual results, Renaissance says its bank extended a ‘multi-option facility’ of $12 million following the breach, an offer the company accepted. The funding is to reduce to $9.5 million in March and expire completely in May.
In a letter accompanying the results, Renaissance chairman Colin Giffney says the company is still expecting payments of at least $3.6 million from its insurers from claims relating to the Christchurch earthquake. $1 million has been paid out so far.
"While we are now compliant with a new banking facility... we need to see a substantial improvement in trading performance,” Giffney says.
"Without speedy restitution of our insured losses the company is under-capitalised. Some sort of recapitalisation may be necessary.”
Renaissance issued a grim financial forecast in September, and Giffney says based on October’s trading even that forecast may have been too optimistic.
The company has opened a store in Christchurch’s ‘container mall’, Giffney says, but although trading has been better than at the temporary store at Blenheim Road, it is less than the company was experiencing prior to the earthquake.
Giffney also addresses the possibility of a sale of the company’s distribution subsidiary, saying ‘we are actively looking at options’.
"We are working to restore mutual respect, competence and trust in the team,” Giffney comments.
"There are some wonderful people in Renaissance and now they should come to the fore.”