LONDON (Alliance News) - Shares in metals producer Wolf Minerals Ltd dropped a third Tuesday as it warned that it would be unable to meet working capital requirements if it cannot come to an agreement on funding, meanwhile Hargreaves Services warned its results could be affected by the fate of the firm.
Shares in Wolf Minerals fell 31% at 1.21 pence, while Hargreaves Services shares were down 5.2% at 320.50 pence on Tuesday.
Wolf Minerals expects to conclude talks with key financial stakeholders for longer term funding solutions later on in the week.
At the end of July, Wolf Minerals increased its existing bridge facility to GBP69 million from GBP65 million, and agreed a standstill with lenders over outstanding fees and default matters, and the deferral of principal and interest payments of GBP2.1 million until October 28.
Wolf Minerals said it also agreed with Resource Capital Fund VI LP for a further GBP4 million secured priority loan, which could go up to GBP5 million.
This new financing was to keep the company going until October 28.
Industrial-focused services provider Hargreaves Services PLC noted the announcement by Wolf Minerals.
The company warned that it has a current net exposure of GBP5.0 million to Wolf made up of trade debt and work-in-progress balances, which could be lost for good if Wolf ceases trading.
It could also reduce Hargreaves' revenue for the year ending March 2019 by GBP15.0 million and pretax profit by GBP1.0 million. For the year ended May, Hargreaves generated GBP488,000 in pretax profit from GBP297.1 million revenue.
