Fortescue Metals shares crashed this afternoon after reports emerged the company is trying to reach a deal with its lenders to waive its debt covenants for a year.
Fortescue shares plunged as much as 15 per cent after the Australian Financial Review reported the company was seeking debt relief from its lenders, as a fall in iron ore prices crunched the company’s profit margins.
Shares in the Andrew Forrest-chaired iron ore miner dropped as low as $2.95 this afternoon, in the company’s sharpest one day plunge in almost four years.
Fortescue last week shed workers in order to slash $300 million a year in operating costs in response to a nearly 40 per cent decline in the iron price since July, which thinned the company’s margins at its Pilbara mines to wafer thin levels.
Though the price of iron ore had since recovered, rumours of further job losses had persisted at the company.
FMG shares closed at $2.99, down 13.8 per cent, or 48 cents.