(Alliance News) - Foreign exchange business Finablr PLC's shares slumped on Thursday as the firm warned on its cash position.
Shares were 55% lower on Thursday morning in London at 10.07 pence each. When it listed in May 2019, shares were priced at 175p.
Abu Dhabi-headquartered Finablr, which owns the Travelex currency exchange brand, is taking "urgent" steps to look into liquidity and cash flow.
This has been hit by a number of issues, Finablr said, including the spread of covid-19 around the world, a recent credit downgrade on Travelex's bonds, a liquidity squeeze, and a perception in the market that NMC Health PLC's problems also relate to Finablr.
The worldwide spread of covid-19, which was declared a pandemic by the World Health Organization on Wednesday, has reduced demand for foreign exchange and payment services, much of which are based in airports.
Finablr's co-Chair Bavaguthu Raghuram Shetty is also a founder of NMC Health. Both firms have been looking into the true nature of Shetty's holdings in each company.
NMC Health announced on Tuesday the discovery of USD2.7 billion of debt the board had not been aware of. Former Chief Executive Prasanth Manghat was fired in February over discrepancies in company finances.
"These factors place significant constraints on the company's access to the daily liquidity the company needs to manage its business effectively and its ability to negotiate longer term financing," said Finablr on Thursday.
"Due to the fast-moving nature of the events and circumstances referred to above, the company is urgently seeking to complete its assessment of its liquidity and cash flow position and negotiate the steps that are necessary to address its short- and longer-term financing needs."
Finablr, which also had to deal with a major cyber attack at the start of the year, is to appoint an independent financial advisor as soon as possible, it said. It has also been reassured there have been no undisclosed related-party transactions nor any off-balance sheet financing arrangements.
By George Collard; georgecollard@alliancenews.com
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Finseta (FIN)