Zamano's shares plummet as it struggles to stay afloat

(ShareCast News) - Zamano, an AIM-listed European provider of interactive applications and services to mobile devices, has announced that it may have to close down its dwindling business operations in order to protect its cash position.Since the company's launch of Payforit, a joint initiative of mobile network operators (MNOS) in the UK to regulate mobile payments, in November 2016, the service has had an on-going and significant impact on the group's business performance.The company has however seen a reduction in performance across all its business lines and has not been able to secure any replacement revenue through new subscribers.Certain MNOs in Ireland are also now requiring all service and payment flows to use similar rules to Payforit in the UK which the company feels will impact its ability to gain new customers in Ireland.The company has taken steps to reduce the cost base of the business since Payforit's implementation, ceasing all ongoing merger and acquisition discussions and focusing on maximising cash-flow from its existing business in the UK, Irish and International markets.Despite the cost reduction methods the group feels it's increasingly likely that the impact of regulatory changes across the group's business lines will prevent the company from maintaining a cash-flow positive trading position going forward.As a result, it feels it is necessary to formally wind down the existing business lines in order to protect the cash position on the balance sheet. It is also considering alternative strategic options. If a timely alternative can not be found the group will look to monetise its UK/Irish listing and make a distribution back to shareholders.Chairman Colin Tucker said: "The Zamano Board is focused on conserving the company's strong cash position by optimising our withdrawal from our existing business lines. The on-going regulatory changes in our industry have forced our hand earlier than anticipated. We are hopeful in relation to our strategic discussions, however in the absence of concluding a transaction which shareholders approve, we will focus on how best to return the maximum amount of cash possible to shareholders."The share price fell 26.32% to 3.50p at 1109 GMT on Friday.