Fortescue in talks with lenders on potential waiver of debts

Australia-based miner Fortescue Metals Group has announced that it is in the process of talking to its lenders about potential waivers in the event that covenants are put under pressure by extended volatility in the iron ore market. However, the company underlined that it is in full compliance with all of its banking covenants and continues to have full access to all of its funding facilities.
 
Fortescue stated that the talks with lenders are a prudent measure that has been taken well in response to market volatility. The company also cut capital expenditure for the financial year 2012-13, putting the expansion plan to triple its production capacity on hold in response to volatile market conditions and uncertainty over future iron ore prices.
 
Following the news that the company asked its lenders to waive all its debt covenants for the next 12 months, Fortescue's shares dipped by 14 percent and closed at A$2.99.