Costa shares suspended ahead of likely profit downgrade and equity raising

Blueberries are coming under price pressure.

Costa’s shares have now been suspended from trade as the market braces for a profit downgrade and a likely equity raising.

It is understood that the company 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.

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.

It is understood pricing pressure for blueberries and mushrooms is taking its toll as more competitors enter the market.

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. The company’s market value sits at $1.1bn.