15th Jun 2020 13:06
(Alliance News) - Walcom Group Ltd warned on Monday that it could sink to liquidation on Friday, with the animal feed firm yet to receive a loan from its chief executive.
The company also said that its revenue in 2019 sunk by more than half, hurt by the outbreak of African swine flu in China.
Walcom expects to report revenue of HKD15.1 million, about GBP1.6 million, in 2019, down 56% year-on-year from HKD34.7 million.
"The company has seen a gradual recovery of the swine market in China, whereby most of its customers have re-commenced ordering the company's swine feed products. Whilst the quantity per order is smaller than before, the company has observed a trend of more regular orders from customers. The board is cautiously optimistic that sales of swine products in China will continue and hopefully accelerate during the fourth quarter of the current financial year," Walcom said.
CEO Francis Chi is yet to provide a proposed HKD1.2 million loan to the company, though has again "reiterated" his intention to offer the financing.
Walcom is need of the funding so it can pay a RMB150,000, about GBP16,849, loan which due on Friday.
Walcom warned: "Therefore, based on Walcom's current cash flow projections, the company will be able to continue operations until June 19. In the absence of the director loan now being received in part or in full by this date, the company would be unable to continue its operations and would be forced into liquidation with a consequential diminution in value to shareholders."
Walcom shares were untraded in London on Monday, last quoted at 0.15 each.
By Eric Cunha; [email protected]
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