Victoria, Australia, August 1, 2006--Australian carpet maker Godfrey Hirst has been confirmed as the prospective buyer for troubled carpet manufacturer Feltex, according to Stuff.co.nz.
Feltex said Godfrey Hirst was offering a $141.8 million rescue package, and bankers had agreed to a share payment of 12 cents a share provided certain conditions were met.
A trading halt on Feltex's shares imposed at the start of today's session has been lifted.
Trading will resume tomorrow. The shares last traded at 13 cents.
Earlier in the year Feltex shares were trading at over 60 cents, and when Feltex first listed in 2004, they were worth $1.70.
Feltex needs a capital injection to meet debts of about $129 million, after breaching banking covenants in June.
The purchase price will clear Feltex's $129 million bank debt.
The debt to the bank is more than six times the company's projected profit for this year.
The move means that Feltex, which employs around a thousand people, will keep going. All current employee entitlements and all current trade accounts in New Zealand and Australia will be taken over by Godfrey Hirst.
Today's move creates the largest carpet maker in Australasia with combined sales of $750 million. The deal is subject to regulatory approval.
