29th Nov 2019 12:18
(Alliance News) -Â Walcom Group Ltd said on Friday cautioned there "can be no guarantee" the company's working capital position will be stabilised despite being hopeful over funding discussions.
Under the terms of an existing bank facility, the livestock products company is required to repay a short-term loan of CNY1 million, around GBP110,346, during the second week of December.
The lender has verbally indicated that following the repayment of the loan, a new loan of the same value will be made available to the company "within several working days".
In order to repay the short-term loan, Walcom will require additional funding. It is in discussions with Chief Executive Francis Chi over the provision of a further loan.
Should the loan from Chi be issued as expected and the bank loan renewed, the company will have adequate working capital to meet its liabilities, until at least the end of January 2020.
However, Walcom cautioned: "Whilst the board is hopeful that discussions regarding the new bank loan and the provision of further funding will have a successful outcome, there can be no guarantee that the company's working capital position will be stabilised."
If it is unable to address the working capital shortfall, the company may be unable to continue its operations and could be forced into liquidation.
Shares in Walcom were untraded on Friday, last closing at 0.35 pence.
By Lucy Heming;Â [email protected]
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