Ocado has defended itself against speculation it could breach its banking covenants and has emphasised it is able to fund its second distribution centre.

The online grocer came under fire from analysts last week after doubts over its balance sheet emerged.

But an Ocado spokeswoman insisted: “We are regularly in dialogue with our banks and they are supportive and aware that the construction of CFC2 [its second customer fulfilment centre] remains on budget and on schedule, with operations due to commence in early 2013.

“We are satisfied that the existing facilities provide sufficient funding for the group to operate for the foreseeable future.”

UBS, one of the banks that helped float Ocado in 2010, cut its EBITDA forecasts for 2014-16 by between 13.1% and 24.5% as analyst Mike Tattersall changed his recommendation from ‘hold’ to ‘sell’.

The downgrade prompted long-term Ocado sceptic and Panmure Gordon analyst Philip Dorgan to issue a note headed The Beginning of the End Game, warning Ocado could breach its banking convenants due to investment in its second customer fulfilment centre in Warwickshire due to open next year.

Dorgan said in the note: “We are forecasting that the risks of Ocado breaching its covenants this year are now significant, which means that we are at the beginning of the end game. Standing alone against the largest retailers in the country with a pile of debt and falling market share isn’t sustainable.”

He added: “We believe that we are now entering a crucial phase of the company’s history. We forecast that it will breach its net debt to EBITDA covenant in the current year. Consensus assumes that it doesn’t. However, it takes only small changes to consensus sales assumptions for a breach to occur.”