Reach4entertainment says PNC not taking action over covenant breach

(ShareCast News) - Reach4entertainment (R4E) said PNC Business Credit (PNC) has noted a three-month breach of a banking covenant by the company but does not intend at this time to exercise its rights in relation to the same.PNC nonetheless said it reserved its rights.The fixed-charge covenant was breached by reach4entertainment in August, September and October 2016, but in November 2016 the covenant was met and was expected to be met at the year end."PNC acknowledged that the breach of covenant was due to seasonal fluctuations in the Group's revenues and is considering restating the covenant test period to a period that would not be sensitive to the seasonality of the Group's business," said reach4entertainment.Executive chair David Stoller commented that reach4entertainment appreciated the continuing support of PNC and their reasonable commercial position regarding the banking covenants.He said this was a reflection of "the trading strength of r4e."At about 13:06 GMT, shares in AIM-quoted reach4entertainment were down 5% to 1.9p.