Wellington  - One of New Zealand's highest profile manufacturers revealed Monday it had been hard hit by the global recession, prompting Prime Minister John Key to float the idea of a possible government bail-out.

Fisher & Paykel Appliances, which exports refrigerators, dishwashers, clothes' dryers and other appliances around the world, issued a surprise warning that its profit could be halved this year after sales to Europe fell 19 per cent and US sales fell 13 per cent.

Alarmed investors wiped 35 per cent off the company's share price after it told the stock exchange its bank debt had increased more than fourfold since March and it might have to seek a cornerstone shareholder if it cannot raise capital.

Describing it as an "iconic" New Zealand company, Key told reporters that he had telephoned chief executive John Bongard to discuss the company's plight.

He said he had not offered help and the company, which was still profitable and had a plan, had not asked for it, but he would not rule out the government becoming a banker of last resort to save jobs and exports.

Key disclosed last month that Treasury officials had done "scoping work" on companies that might need to be bailed out because of the recession, "if we got into a situation where a New Zealand corporate could not raise money in its own name, could not receive the level of funding that was required from the banks and we deemed it to be in the best interests of the country for the government to step in and provide those funds on a temporary basis."

He refused to identify specifically Fisher & Paykel as one of a "limited group of corporates which would sit within that quarter," but said he would keep in touch with Bongard.

Key said Fisher & Paykel employed 1,600 people in New Zealand and it was important for the government to understand its options and the circumstances in which it might act. (dpa)