(Alliance News) - Pelatro PLC on Tuesday said a key customer, which owes USD550,000, will no longer meet a previously agreed payment deadline expected this month.
This delay in payment prompted the London-based marketing software provider to undertake a wider review of its outstanding receivables, alongside its usual half-year procedures.
Shares in Pelatro were down 46% to 4.30 pence each in London on Tuesday morning. The stock is down 82% in the past 12 months.
Following the review, Pelatro confirmed it is experiencing "unusual delays" regarding receivables from four customers, worth an aggregate USD1.1 million of a USD4.2 million in receivables.
Pelatro said it is in "active and constructive discussions" with the four customers and expects a "positive" resolution.
"The delays are partly due to the countries in which the customers are based, being Nepal, Myanmar and Bangladesh, where the governments are yet to provide approval to the customers to make the contractual payments. This is because it involves payments to a foreign entity, which is government regulated and requires prior authorisation in these countries," Pelatro explained.
In two instances, Pelatro noted recent disputes over due receivables, where two customers, based in Nepal and Myanmar, were unwilling to pay for the services and products received.
This impacts USD375,000 of the total USD1.1 million, Pelatro said.
The company continued: "The board remains confident of collecting those amounts that are awaiting government approval in the respective countries but has currently no certainty as to the timing of the transfer of funds and is mindful of the impact on working capital of these delays continuing."
Pelatro said it expects to collect around USD2.6 million from other customers between July and September. However, based on current assumptions and management forecasts, the company said it will require additional external funding in the final quarter, depending on "the extent that the outstanding receivables are collected and over what time-frame".
As a result, the board is "prudently" exploring financing and funding options "should this be necessary", Pelatro said on Tuesday, adding it update shareholders "as appropriate".
Earlier in the month, Pelatro had said it will continue evaluating potential acquisition opportunities, despite one potential purchase falling through.
It had been in "early stages of evaluating one particular opportunity which would have added recurring revenue and cash flow as well as diversified the company away from emerging markets with a broader geographic presence".
However, it noted that the owners of that target indicated that they were unlikely to want to sell the business in the near term and hence discussions were terminated.
By Greg Rosenvinge, Alliance News reporter
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