LONDON (Alliance News) - Engineering company Hightex Group PLC saw its shares drop sharply as it resumed trading on AIM Wednesday, a move that came after it signed a loan facility agreement of up to USD10 million, giving it enough money to cover its working capital needs for at least six months.
The company's shares had been suspended last September after it said it could publish its interim financial statements because of uncertainty over certain receivables due from its Brazilian joint venture SEPA Hightex Coberturas Ltda.
Hightex, which makes cable supported membrane roofs and facades, said Wednesday that it has now clarified its financial position and made a provision for the receivables. It didn't say how much it has set aside, saying the provision will be clarified after further talks with the company's auditors.
It said it made a pretax loss of EUR1.5 million in the six months to June 30, 2013, wider than the EUR1.0 million loss it made a year earlier as revenues fell to EUR3.4 million, from EUR7.9 million. Most of the revenues came from the work it has done on two stadia for the football World Cup in Brazil, while revenues from its SolarNext unit were "disappointing".
The uncertainties on receivables from its Brazilian joint venture relate to work it was doing on three other stadia for the World Cup. Back in September, it had said it was having difficulty getting the relevant financial information on the three projects that would enable it to finish its financial statements.
The company's new loan facility is with TCA Global Credit Master Fund LP. The company has drawn down USD1.8 million of the facility, but said it provide enough working capital for at least the next six months.
"In reaching this conclusion, the directors have assumed that the company will secure a lower level of revenues in the current financial year than those achieved during the financial year to 31 December 2013 and modest inflows from the company's (non-Brazilian) debtors," it said in a statement.
The loan has a coupon of 12% a year, a drawdown fee of 3% and a collection fee of 0.5% a month on amounts outstanding. It is secured by a debenture of Hightex's assets. It has a six-month term, extendable for further periods of six months at TCA's discretion, and there is also a loan services fee of USD200,000 in Hightex shares that's payable if TCA requests it.
Hightex Group shares were down 59.6% at 0.485 pence Wednesday morning, the biggest fall on AIM.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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