- Reach4entertainment has received a letter from PNC Business Credit that notes the company breached a fixed-charge covenant in August, September and October 2016, but that in November 2016 the covenant was met and was expected to be met at the year end.

"PNC acknowledged that the breach of covenant was due to seasonal fluctuations in the Group's revenues and is considering restating the covenant test period to a period that would not be sensitive to the seasonality of the Group's business," said r4e in a statement.

"PNC has informed the Company that, whilst reserving its rights, it does not intend at this time to exercise its rights in respect of the covenant breaches."

Earlier, r4e announced it was expecting a potential breach of one of the covenants in its three-year secured asset-based debt facility with PNC in the second half of 2016.

The reason for the breaches was because the fixed charge covenant with PNC is determined on a 3-month rolling basis and is therefore sensitive to seasonality fluctuations in EBITDA and, as announced in the Interim Results, the Company's results have been H1 weighted in 2016.

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