31st May 2016 08:28
LONDON (Alliance News) - PCG Entertainment PLC on Tuesday said it is in disputes with a supplier and a principal customer which could "materially affect the company's trading and financial position going forward".
Shares in PCG were trading down 45% at 0.465 pence on Tuesday morning following the announcement.
The Asia-Pacific online gaming and media company said the dispute with the supplier arose from a debt repayment due to be paid to the supplier by Kolarmy Technology Inc.
Kolarmy is the former major shareholder of Center Point Development Corp, which PCG bought in 2015. The acquisition agreement between PCG and CPDC provided that CPDC's debtor, creditor and cash balances at that date would remain with Kolarmy post-acquisition except for USD69,100 in cash and creditors of USD19,100.
In addition, PCG, Kolarmy and CPDC's principal supplier entered into an agreement whereby CPDC was released from its obligations in connection with a debt to the supplier of USD2.7 million and all the supplier's rights against CPDC in respect of the debt were cancelled, as Kolarmy agreed to assume all of the obligations and liabilities owed in connection with the debt.
On Tuesday, PCG said it has become aware that Kolarmy has not repaid the debt, resulting in a dispute between PCG and the supplier, the latter which is now seeking repayment from PCG.
"Whilst no legal action has yet been taken, this dispute could materially affect the company's trading and financial position going forward," PCG said in a statement.
On top of this, PCG said it is also in dispute with a principal customer over trading terms previously agreed.
"Whilst the company is working to and expects to resolve this ongoing matter, the company is currently owed certain receivables, which if not received may place further pressure on the company's trading operations," PCG said.
PCG added that it is taking advice and is seeking to resolve the disputes amicably.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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