(Alliance News) - GYG PLC on Wednesday said it will experience a working capital shortfall amid outstanding invoices and has taken a short-term EUR3 million loan to remedy the drop.
Shares in GYG - which is based in Palma de Mallorca, Spain but has offices in London - were down 17% at 71.00 pence in London on Wednesday.
The superyacht maintenance company is handling payment delays at Nobiskrug shipyard in Germany, with whom it has three active contracts and invoices outstanding totalling around EUR2.8 million. Back in April, GYG announced that administrators had been appointed at the shipyard.
GYG advised that discussions at Nobiskrug have taken longer to conclude than anticipated and a swift resolution cannot be guaranteed.
The Spanish firm's second largest shareholder Harwood Capital LLP has provided a EUR3 million emergency short-term loan to minimise capital shortfall.
GYG was already in talks with Harwood for a takeover offer. Talks commenced on April 9 and the 'offer or no offer' announcement deadline has been extended three times. The current deadline is August 20.
The conditions of the short-term loan are interest at 10% per year and a repayment deadline of December 31. GYG said it intends to repay the loan to Harwood once it has reached a resolution to the situation at Nobiskrug.
The yacht firm added that trading for the six months ended June 30 was "broadly in line" with management's expectations and it will publish a detailed trading update for the first half of the year during August.
One conclusion the firm is closer to is with the Spanish Tax Authority, which conducted an audit into GYG's legacy tax matters to decipher money owed. The company has made a provision of EUR1.1 million for the settlement and said an agreement in principle has been reached.
By Josie O'Brien; josieobrien@alliancenews.com
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