Shares in Inland Homes PLC (AIM:INL) plunged 30% today after the company warned of further losses in the current fiscal year which will mean it has breached a number of lending covenants.
The AIM-listed company said it anticipates losses for the financial year and net assets of approximately £90.0mln and has increased provisions for its remaining construction projects to £28.8mln from £15.4mln.
Despite the increased provisions and losses, Inland Homes said it remains “a going concern”, but it does mean that the group “will have breached the net assets and gearing covenants with one lender and the net asset and quick asset ratio covenants for another lender, where the group's combined borrowings are currently £49.3mln.”
The company is in talks to secure waivers for both the existing and any forecast expected future covenant breaches for the two lenders concerned, it said.
“Whilst the board believes that these waivers will be forthcoming, they consider that if required, these borrowings can be refinanced.”
As part of an ongoing review the company also announced plans to sell a number of non-core assets as well as reporting the completion of a £9.5mln sale of its greenfield "strategic land" option portfolio consisting of 2,822 potential plots.