NZ's biggest meat processor Silver Fern Farms is asking its banks for a waiver after the falling dollar caused it to breach a banking covenant reports the NZ Herald. The company said it was following accounting practice relating to its foreign currency hedging."As a result of this, and due to the recent rapid decline of the NZ dollar against the US dollar, Silver Fern Farms has advised its banks that it is not currently in compliance with its minimum shareholders' funds covenant." Chief executive Keith Cooper said the non-compliance had nothing to do with business funds and the company had not breached any earnings covenants. "No one foresaw such a drop [in the dollar]," Cooper said. "It's nothing to do with cash flows or anything like that, it's essentially a non-cash item. It's purely a hypothetical what-if measure at month end." The Dunedin-based co-operative had requested a waiver from its banks, which were considering revising the covenant to accommodate such volatility.
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