Costa Group is thought to be in talks with its lenders following the suspension of its shares from trade on Wednesday and as the market braces for a profit downgrade and an equity raising.
It is understood that Costa Group remains at risk of breaching its debt covenants.
The company entered a trading halt on Monday ahead of what was expected to be an announcement about a hit to its earnings.
Now it is believed the group will tap the market.
The situation has also sent shares of its landlord, Vital Harvest Freehold Trust, 6.8 per cent lower on Wednesday.
It is understood pricing pressure for blueberries and mushrooms is taking its toll as more competitors enter the market.
When releasing its results in August, Costa said it had $304.9m in net debt, which equates to 2.59 times earnings before interest, tax, depreciation and amortisation.
Costa shares dived on August 23 when the fruit and vegetable grower, packer and marketer posted a 15 per cent fall in net profit for the half year due to challenging weather conditions. Its market value sits at $1.1bn.
Add your comment to this story
Webjet investors bet private equity lifts ‘opportunistic’ bid
The Melbourne based buyout fund could face some stiff competition in its $314m quest to control the online travel agency.
Top Rothschild banker to join Jarden
The veteran deal-maker has worked on some of the country’s most high profile transactions.
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout