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STOCKHOLM (Reuters) - Swedish web search engine group Eniro has reached a deal with its banks giving it more time meet its debt covenants, Swedish daily Svenska Dagbladet reported on Thursday.
Eniro in September cut its 2014 profit forecast for the second time in two months, after finding accounting inaccuracies which led it to ask police to investigate its former chief executive.
Eniro shares were halted for trading earlier on Thursday after another media report saying negotiations between Eniro and lenders were heading for failure. Business daily Dagens Industri said Eniro's banks were demanding the company's top management should be supervised by external consultants, while its board was mulling stepping down.
Shares in Eniro, which declined to comment on that report and was not immediately available for comment on the latest report, fell 20 percent before the trading halt. So far this year, its shares are down 85 percent.
Svenska Dagbladet said Eniro and its lenders had agreed the company would get a three-month respite on debt covenants, in return for which a consultancy would scrutinize the work of Eniro executives.
According to its latest report, Eniro had interest-bearing net debt of 2.2 billion Swedish crowns ($303 million) at the end of the second quarter, more than three times its latest forecast of 2014 earnings before interest, tax, depreciation and amortization (EBITDA) of 700 million crowns.
Its target is to have net debt of not more than two times EBITDA.
Earlier this month, Svenska Dagbladet said Eniro's lenders were considering taking control of its assets or forcing a share issue. The company dismissed that report.
Eniro shares lost a third of their value on the day of that report before being halted but had since recouped most of those losses.
Eniro is due to report third-quarter earnings on Friday.
(Reporting by Sven Nordenstam; Editing by Alistair Scrutton and David Holmes)