Cordiant shares fall on banking worries

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The Independent Online

Cordiant Communications came under mounting pressure to clarify its financial position yesterday as shares in the advertising company registered a 15 per cent fall.

Some in the City, who had been expecting the old Saatchi & Saatchi business to publish its results for 2001 yesterday, speculated the company was having serious trouble getting its bankers to relax certain conditions attached to its borrowings.

Others, however, maintained that the delay in publishing those figures had been well documented and that the company, headed by the chief executive Michael Bungey, had made it clear the figures would be released in the second half of this month. "They did originally, quite some time ago, announce they planned to announce results today [Friday]. But that has not been the case for at least a week and so anyone expecting those results this morning indicates they're behind the curve," one analyst said.

Nevertheless, the confusion took its toll on the Cordiant share price which closed down 12p at 70p last night.

Cordiant, which owns the financial PR agency Financial Dynamics, has long been in talks with its bankers to try to persuade them to relax the covenants attached to its borrowings.

It has also been beset by a raft of problems, after a profit warning in December, including the loss of the car maker Hyundai as a client as well as the departure of the chief spin-doctors Nick Miles and Hugh Morrison from Financial Dynamics.

Analysts now fear the company's impending set of results will have to feature an asset write-down of as much as £200m to cover the fall in value of its acquisition of Lighthouse.