A Manchester company has warned "various macroeconomic factors" have forced its borrowings to exceed its current limit.
McBride, a manufacturer and supplier of private label and contract manufactured products for the domestic household and professional cleaning and hygiene markets, has been "significantly impacted by and continues to experience a period of uncertainty" which has also seen a reduction to the value of the adjusted capital and reserves in the company's balance sheet.
As a result, the listed business is seeking shareholder approval to sanction an increase in its borrowing limit.
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According to McBride's Articles of Association, the company's borrowings must now exceed a sum equal to two times the aggregate of the amount paid up on the issued share capital of the business and the total of the capital and revenue reserves of the group.
Shares in McBride, whose brands include Oven Pride, are currently trading at 16.7p each, down from 87.4p a year ago.
The company is also to publish its full-year accounts for the 12 months to June 30, 2022, on September 29. In a trading update issued last month, the group said it had "experienced both exceptional input cost inflation and supply chain disruptions, most recently further exacerbated by the Ukraine war".
However it added that the impacts had been predominantly offset through pricing actions". McBride said that as a result its revenue grew by 2.9% during the year.
A statement issued to the London Stock Exchange said: "The group has been significantly impacted by and continues to experience a period of uncertainty caused by various macroeconomic factors which has resulted in an increase in the group's borrowings and a reduction to the value of the adjusted capital and reserves in the company's balance sheet.
"As the borrowing limit in the company's articles of association is calculated by reference to the adjusted capital reserves in the company's latest audited consolidated balance sheet, when the company publishes its audited accounts for the financial year ended 30 June 2022, it is expected that the group's borrowings will exceed the current limit in Article 89.2 of the articles.
"The board is therefore seeking shareholder approval in order to sanction an increase in the group's borrowing limit (as permitted under Article 89).
"The directors have secured irrevocable undertakings from certain of the company's largest shareholders representing a majority (58.4 per cent) of the company's shares to vote in favour of the proposed resolution.
"The board considers that the resolution set out in the notice of general meeting is in the best interests of the company and of its shareholders as a whole and unanimously recommends shareholders to vote in favour of it, as each of the directors intends to do in respect of their own beneficial holdings."
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