The company released a statement Wednesday night stating that, due to a review of cash flow numbers by a new management team, discussions had begin with primary financier, 1918 Finance Pty Ltd, in an effort to extend the limit on its existing $30 million senior debt facility.
1918 Finance has reportedly agreed to consider the extension, but requires a substantial repayment proposal from Godfreys as part of any further financial accommodation.
Godfreys’ executive team will additionally be looking at earnings projections, and notes that there will be a further announcement about this in the near future, and urges shareholders and investors not to rely on previously published earnings guidance.
Arcade Finance, one of Godfreys’ major lenders and vehicle of Godfreys co-founder John Johnson, has indicated should it reach 90 per cent relevant interest in Godfrey’s it would proceed to compulsorily acquire any remaining outstanding shares and has currently received acceptances from more than 80 per cent of all shareholders.
“Arcade is concerned that the disappointing recent financial performance of Godfreys, and the lack of positive impact from the turnaround strategy, will damage Godfreys’ future business prospects,” said Arcade, “as such, Arcade is willing to offer improved terms in order to encourage a speedy completion of its offer.”
Arcade is hoping to purchase the business and execute an alternative turnaround plan in an effort to save the failing business.
Being slow to respond to shifting demand toward stick vacuums, and increasing competition from the likes of Harvey Norman and JB HI-FI, are key reasons for Godfreys deteriorating performance in recent years.