19th Sep 2014 07:53
LONDON (Alliance News) - Eco City Vehicles PLC suspended its shares on Friday as the group said its One80 subsidiary is set to be placed into administration and said it remains in talks with potential funding sources as it faces challenging trading conditions.
One80 owns the intellectual property rights to the rear-wheel steer technology and other design rights used on the Mercedes Vito taxi. Production of the Mercedes Vito is currently on hold due to existing levels of stock of completed vehicles, Eco City said.
A lack of production revenues and the impending legal case against One80 has now forced the subsidiary to notify shareholders of plans to appoint an administrator.
Eco City also said it is facing continued challenging trading conditions, requiring the company to seek new funding. The group said it is in talks with a potential funder which may or may not lead to additional funds being secured for the business.
Due to the potential administration of One80 and the resulting contractual issues Eco City has faced with third parties in executing divestments under its strategic review, the company said it would suspend trading in its shares. It said there is currently uncertainty surrounding the group's financial position and prospects.
Shares in Eco City were quoted at 0.325 pence prior to the suspension.
By Sam Unsted; [email protected]; @SamUAtAlliance
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