23rd Feb 2024 20:14
(Alliance News) - Shares in Saietta Group PLC plunged on Friday after it put itself up for sale amid doubts over its survival.
Shares in the company slumped 70% to 1.72 pence on Friday in London.
The Towcester, England-based manufacturer of drivetrain systems for electric vehicles said it is becoming increasingly aware that certain contracted cash receipts may be withheld. This may bring forward the date "on which the company can no longer solvently trade", in the absence of any further funding.
"Should the company not have made material progress with its formal sale process or with any other financing initiatives by the end of next week, the company may need to commence planning for an administration," it warned.
Saietta stressed, however, that its cash flow model shows positive cash balances to the end of March.
One option being considered is a sale of the company, and Saietta said it was in discussions with a potential buyer which are at a relatively early stage.
Another option under consideration is to seek investment which may offer the scope for existing investors to participate.
But Saietta pointed out that, given the current market capitalisation of the group, a significant investment could trigger the requirement for a waiver under Rule 9 of the Takeover Code.
Saietta has appointed Ernst and Young LLP to undertake a strategic review and formal sale process.
Saietta said it continues to believe in the quality of its products and the compelling market opportunity, and accordingly remains hopeful that a solvent solution for the company can be found.
By Jeremy Cutler, Alliance News reporter
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