Raymarine, the maker of electronic equipment for boats, said today that it is unable to comply with certain financial covenants and reported a 23 per cent drop in sales for the first 10 months of the year.

In its interim management statement, the group said that it had ended the period with a net debt of £91.6 million and that it was in discussions “with interested parties” about a potential sale of the business or an equity fundraising.

Shares plummeted 32 per cent to 7.9p this morning, down from 11.5p yesterday.

Raymarine added that it had incurred significant exceptional costs in relation to professional and bank fees that were much higher than expected earlier in the year as a result of “continuing exploration of the long term refinancing options”.

During the ten-month period, Raymarine, which makes autopilots, marine radars and GPS systems for leisure boats, had sales of £88.9 million, compared with £115.3 million a year ago.

The group said that their existing banking facilites mature on March 31 next year and they are reliant on continuing covenant waivers from their banking syndicate. The current waivers expire on December 4.

To meet forthcoming funding requirements, an additional facility of £15 million has been agreed with the syndicate. This also expires on March 31 next year.

“In light of these discussions the Board considers it increasingly likely that little, if any, value for ordinary shareholders will be realised,” it added.

In June, the Portsmouth-based group warned that it was close to the limit of its banking facilities and in August it said that it was in discussions with Garmin, the US sat-nav giant, about a possible takeover.

Shares soared when the discussions were announced, but nothing has yet come of them.

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