LONDON (Alliance News) - Surgical Innovations Group PLC on Tuesday said it has entered talks with its lenders after a review of its forecasts for the financial year indicated it may miss the earnings covenant on its loan.
Surgical Innovations said it has been substantially reducing inventory levels this year in order to focus on its cash flow generation, but said this process has a direct, adverse impact on its profitability.
As a result, it now thinks it may miss the earnings before interest, taxation, depreciation and amortisation covenant on its GBP3 million term loan from Yorkshire Bank and has therefore started formal talks with the bank on the issue.
Surgical Innovations shares were down 16% on the news to 1.4 pence.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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Surgical Innovations (SUN)