Opus Group must repay $20 million of debt by the end of the month but is confident it can renegotiate with its bankers.
According to the group's 2012-13 report: "At 30 June 2013, due to the requirements of the debt facility in place at the balance date, the group had a requirement to repay $25,963,000 of debt to its financier in the 12 months to 30 June 2014. Of this amount, $20 million is due for repayment by 30 September 2013."
Opus said it was negotiating a new repayment schedule with the Commonwealth Bank.
"The group is currently in advanced discussions with its senior financier in order to restructure its debt facility, including so as to extend the date of repayment of these amounts and revise the terms under the facility agreement.
"The group has received a proposal from its senior financier and the directors are considering the terms of the proposal. The directors anticipate that an agreement on these matters will be reached with its senior financier shortly."
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Opus added in an announcement to the ASX: "If, however, agreement cannot be reached, Commonwealth Bank of Australia will become entitled to request the immediate repayment of loans under the facility agreement, in which event an appropriate announcement will be made in that regard at that time."
Chief executive Cliff Brigstocke told ProPrint that Opus was "confident of successfully completing a revised funding structure".
"The company is in the process of selling its outdoor business, and is talking to a number of interested parties. The sale of the business will be used to pay down debt and this will form part of the revised financing arrangements with Opus' lenders."
According to Opus' results for the 12 months to 30 June 2013, the McPherson's Printing merger drove a 29.3% year-on-year jump in revenue to $97.2 million. Asset sales helped reduce net debt from $62.9 million to $57 million.
However, the group slipped from a $1.8 million loss to a $2.8 million loss, despite a forecast in January that it would return to profit.
Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 31.6% to $14.1 million.
[Related: Opus wins $6m of govt work]
Opus appears to have already renegotiated its debt repayment schedule at least once this calendar year. Under the terms of a previous agreement, Opus had to ensure that it ended 2012-13 with net debt no greater than three times underlying EBITDA. That would have meant a debt figure no higher than $42.3 million. Brigstocke declined to comment due to "commercial in confidence".
Brigstocke said the group's strategy of extending its service offering while cutting costs had started to bear fruit.
"Since the consolidation in the Canberra market, Opus Group has won two major tenders, reinforcing the full-service offering we provide," he said.
"We expect to see [market] conditions gradually pick up after the Australian Federal election on 7 September 2013 and anticipate the improved trading conditions in the fourth quarter will continue.
"There will also be a continued focus on reducing overall net debt level beyond the current scheduled debt repayments over FY14 and FY15.
"The impact on traditional print supply chain and the general print industry is evident with publishing customers ordering shorter print runs, more often, and requesting faster turnaround times in order to deliver content faster, which suits the Opus Group business model."
[Related: Ups and downs of Opus]
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