Wellington, New Zealand, June 23, 2006--Feltex Carpets Ltd. is in talks with an investor to raise more equity, the National Business Review reported, citing a person close to the company.
Shares of Feltex were halted pending an announcement from the company today, it said in a statement to the New Zealand stock exchange. Feltex shares traded at 36 New Zealand cents yesterday and have dropped 22 percent this year.
Feltex's financial position may be worse than expected, the Review said, citing a research note by First NZ Capital.
An equity-raising deal was imminent and doesn't involve rival carpet-maker Godfrey Hirst Australia Pty, which last year broke off talks about a merger between the two companies, the Review said.
Earnings forecast by Feltex may assume a larger gain from an Australian government investment subsidy than the company is likely to get while total borrowings reported at its first-half results didn't include some interest-bearing securities, the Review said.
