VDM receives waiver on banking covenant

VDM Group's difficulties are continuing, with the consulting, construction and contracting group revealing it has come to an agreement with its financiers to alter its lending covenants.

VDM announced on Friday that its bank had agreed to waive the interest cover ratio covenant measurable at March 31.

"The interest cover ratio would have been breached as a result of delays in the award and commencement of new contracts, and the company remains confident of restoring its order book in the near future," VDM said in a statement.

It said all other covenants were met, but it would also seek similar waivers for EBITDA dependent covenants to be measured at June 30.

Early last month, VDM Group surprised the market when it announced the retirement of its chief executive Ken Perry, after just more than a year in charge.

In February, VDM recorded a disappointing interim loss of $16.4 million, compared to a $5.2 million profit in the previous half year.

At 10:25AM (WST) VDM's stocks has slipped nearly 7 per cent, to trade at $0.20.