LONDON (Alliance News) - Nova Resources Ltd Tuesday said its loss widened in the first half of the year, mainly due to the re-valuation of its warrants over Tricor PLC shares, and it warned again that it is in a critical cash position.
The investment company reported a pretax loss from continuing operations of GBP2.5 million for the six months to June 30, wider than the GBP623,000 loss it reported a year earlier. It didn't earn any revenue in the half, and the loss was mainly due to a loss on financial assets designated at fair value on its profit and loss account.
Nova Resources bought warrants over 34 million Tricor shares in February, financing the deal by converting 200 million warrants in Nova attached to its unsecured loan notes into new shares.
It has since run into financial difficulty, and its shares were suspended at the end of June when it delayed the publishing of its 2013 results.
Its directors aren't taking a salary until the company has sufficient cash. It will need to drawdown money remaining in investment facilities or raise new capital if it is going to meet its ongoing financial commitments.
An investment Nova made in renewable energy company Enerstry Group Ltd will be critical. In January, it bought a 23.72% stake in the company and provided a USD806,480 unsecured loan, which bore an interest rate of 10% a year and was due to be repaid by January 18, 2015.
Nova thinks most of the loan hasn't been used and it intends to seek that the majority is repaid, with interest, in January.
"This repayment will be vital in providing financing to the company. However, given that the loan is unsecured, there can be no guarantee that this loan will be repaid in the timescales and manner that Nova's board anticipates," it cautioned.
It has investment facilities of up to GBP500,000 with Upside Management (Offshore) SAL and Consiliou Growth Fund. However, it drew down GBP258,000 from each facility in January. Upside and Consiliou have both confirmed that the funds of over GBP400,000 remaining in the facilities may be used by Nova for working capital purposes, Nova said.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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