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Reuters
Published
Apr 22, 2009
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West 49 warns of more bank covenant woes

By
Reuters
Published
Apr 22, 2009

TORONTO, April 22 (Reuters) - West 49 Inc (WXX.TO) said on Wednesday 22 April that it was in violation of its bank covenants and warned that it may do the same in the next quarter as well.



The trendy sporting goods retailer, which reported a 50 percent drop in its fourth-quarter results, said it negotiated a waiver for the default, which lowered the company's maximum limit on its credit facility, reduced the seasonal increase available on the operating line and capped its term loan facility.

But it said it may be in violation of another covenant at the end of the first quarter.

The company said the revised credit facilities, along with cash generated from operations, would be sufficient to fund its operations and capital expenditures during the year.

The youth fashion retailer also said it earned C$1.1 million, or 2 Canadian cents a share for the quarter ended Jan. 31, down from C$2.2 million, or 4 Canadian cents a share for the same time last year.

The company's shares have fallen about 59 percent in the past year.

($1=$1.24 Canadian) (Reporting by Scott Anderson; Editing by Derek Caney)

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