Nufarm has raised its net debt estimate by 38 per cent, knocking its shares down nearly 10 per cent, and said it expected to sign an agreement with its lenders soon to waive debt covenants.
Nufarm, one-fifth owned by Japan's Sumitomo Chemical, also reaffirmed it expected its net operating profit for the year to July 31, 2010, would be between $55 million and $65 million, in line with a massive profit warning it gave in July.
It raised its net debt estimate to $620 million at July 31, as it had yet to receive cash from sales made in June and July.
Nufarm shares initially tumbled 9.4 per cent to $3.49, and closed down 26 cents, or 6.75 per cent, at $3.59.
The stock has been battered since Sumitomo agreed to pay $14 a share for its stake last December, and shareholders stumped up $5.75 a share for new stock in a $250 million raising in April, as sales of Nufarm's key weedkiller, glyphosate, have slumped.
Nufarm said several of its lenders had already provided waivers on covenant breaches and the remainder of its banking group had set out terms of a waiver this week.
"That proposal has been reviewed by Nufarm and the company believes the terms can be met," the company said.
Nufarm said it received from several members of its banking group on Tuesday terms of a waiver relating to covenant breaches resulting from the lower-than-expected annual profit result.
The terms of those waivers could be met, and formal documentation of a waiver agreement should be finalised by mid-September, the company said.
The other members of its banking group already had provided waivers, Nufarm said.
"Nufarm has commenced discussions with its financiers aimed at transitioning to a revised banking structure that will more closely meet the needs of the business and should result in other efficiency benefits," the company said in a statement.
"It is proposed to have the new structure in place before the end of the calendar year."
Chairman Don McGauchie also said it was conducting a strategic review of the business, assisted by Deloitte and Gresham Advisory Partners.
The review, covering aspects such as budgeting, information systems and management reporting, is expected to be concluded by the end of calendar 2010.
Nufarm reports its finalised annual results on September 28.
Reuters, AAP