The New Zealand Wine Company says the high dollar has pushed it to the brink and it is in breach of one of its three banking covenants.
The listed Marlborough wine company says it will make a full year loss, and fall significantly short of the covenant which requires its underlying earnings to be at least 1.3 times its interest costs.
Its bankers have agreed to waive the breach, pending an independent review of the company's financial forecasts and business model.
The New Zealand Wine Company's two main brands are Grove Mill and Sanctuary, and three-quarters of its business is exported to Australia, the United Kingdom and the United States.
The company generated more than $13 million in revenue in the 2010 financial year but chairman Alton Jamieson says it is now struggling with such a strong New Zealand dollar.
Mr Jamieson says the company is looking at how to return to profit and is keen to export to Asian markets, but there is still an underlying problem of industry-wide supply and demand.