4th Nov 2013 14:53
LONDON (Alliance News) - Time finally ran out for travel group Travelzest PLC Monday after its lender demanded repayment of all the money it is owed, a bill the company cannot currently afford.
The company has been struggling with its debts all year, carrying on trading only because its lender granted it week-long extensions to its working capital facility. Its primary lender had been Barclays, but the bank passed the debts on to Elleway Acquisitions Ltd in September.
Travelzest has wanted to renegotiate the terms of its loans and banking facilities since July because interest payments were hitting earnings. The company called the situation unsustainable, and is trying to find other sources of funding so it can refinance and make new investments.
Last week, Elleway had extended its working credit facility until today, the latest in a series of extensions. However, Travelzest had cautioned each time it got an extension that Elleway could call in its debts at any time. It was completely reliant on the working facility to carry on trading.
Travelzest Monday said that its shares have been suspended from trading on AIM with immediate effect because Elleway's repayment demand means "there is a material uncertainty around the company's short term working capital position".
It said it would make further announcements as appropriate.
Travelzest shares last traded Monday afternoon down 6.7% at 1.40 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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