Damovo Group's bonds plunged 15 points to 40-41 on poor second quarter results. In an interim report to Damovo note holders, the UK-based IT services provider said it would be deferring its Oct. 30 interest payment to holders of its '12 senior notes. It also said it had hired financial advisory firm Houlihan Lokey Howard & Zukin to explore strategic alternatives for the business.
Damovo posted E2.3 million of EBITDA in the second quarter, compared to a E1.9 million EBITDA loss in the first quarter of 2006. Poor performance at its Italian operation, which has seen a downturn in public sector contract awards, pulled down its results. The Italian business posted a E2.9 million EBITDA loss in the second quarter, compared with a E5.3 million EBITDA loss in the first quarter. Damovo's bonds have declined since June on concern about the company's financial performance (CIN, 7/06). A call to Bob Contreras, cfo, was not returned.