Mosaic Group will close its United Kingdom division and take other measures as a result of its "unacceptable" third-quarter earnings. And it could end up filing for bankruptcy protection in the U.S. and Canada.
The Toronto-based direct marketing services firm reported a loss of C$395 million, compared with an C$11.3 million profit during the same period last year. In addition, it reported a third-quarter impairment charge of C$347.6 million.
The company said it will fail to meet the terms of its three main credit facilities, and may not be able to continue in business without the "continued support" of creditors.
Mosaic has roughly C$10 million in available cash and undrawn credit lines, not enough to fund the business beyond the short term. It is trying to obtain additional financing.
The company said it will default on Dec. 13th and Dec. 15th interest payments for a total of C$5.4 million.
In a related development, Gregory F. Kiernan resigned form the firm’s board of directors.
CEO Marc Byron said in a statement that the company "remains a viable business." Byron added that the firm is in "discussions with our lenders to address our short-term liquidity needs, as well as exploring options to address our long-term capital structure.
