Business

Smiths City granted extension on loan repayment

Retailer Smiths City has reached an agreement with ASB Bank to delay a $1.5 million dollar repayment of a loan due tomorrow.

It also said it is starting talks with potential investors to support the business.

The company said Covid-19 has caused an unforeseen and unprecedented shock to the business, and forced the closure of its stores and online business

It said the repayment delay, which is part of its $65 million borrowing will give it time to line up investors.

Smiths City said it believes it has enough capital to cover its debts as they fall due, but said its current capital structure is not sustainable given the outlook and it must secure more funding.

It is working with PWC to develop a strategy for addressing its capital structure, and is negotiating new deals with landlords, cancelled or deferred spending, and cut directors' pay by 20 percent.

Almost all its 465 employees have been stood down on 80 percent of their wages.

This article was originally published on RNZ and re-published with permission.

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