LONDON (Alliance News) - Management Resource Solutions PLC said Tuesday that it has had to arrange new funding after facing a shortage of cash, and it will not apply for a lifting of the suspension of its shares on AIM due to a possible delay in the publication of its accounts.
"The directors of MRS have become aware that certain of the funds raised by way of a placing of new shares in August 2016 to finance the acquisition of SubZero (now MRS Services Group) were not applied to MRS Services Group's working capital as anticipated," said the company.
MRS said the non-application of the funds and not receiving amounts from consulting contracts means the group will face a "cash constrained period" over the next two month.
Therefore MRS has had to secure a AUD6 million invoice finance facility from Hermes Capital Australia Pty Ltd, at an advance rate of 80% of applicable invoices. This facility will be in place for a minimum of 12 months and is secured over some of the company's assets. MRS said this facility, plus already announced savings and existing facilities will provide "adequate headroom for operations for the foreseeable future".
MRS also noted that it has only recently been able to access the management accounts of the company through which it previously operated its consulting business and head office. This has delayed the audit of its results to June 30, and the company said there is "no certainty" it will achieve this prior to December 31 as required by AIM rules.
As such, MRS said it will not apply for the lifting of the suspension of trading of its shares on AIM until it has "more clarity" on the likely completion of the accounts.
By Adam Clark; adamclark@alliancenews.com
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