WALG.L Regulatory News (WALG)

Walcom Group Ltd - Director Loan

PR Newswire

London, September 26

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR")

26 September 2019

WALCOM GROUP LIMITED(“Walcom” or “the Company”)

Director Loan

Walcom announces that Walcom Bio-Chemicals Industrial Limited, a wholly owned subsidiary of the Company, has entered into a loan agreement (the “Loan Agreement”) with Francis Chi, Chief Executive of the Company. Pursuant to the Loan Agreement, Mr Chi has made available a loan of HK$350,000 to Walcom-Bio Chemicals Industrial Limited for working capital purposes.

Under the terms of the Loan Agreement, interest is payable on the principal loan amount at a rate of 8 per cent. per annum and the loan principal (and accrued interest) is repayable on 25 September 2020. In addition, the loan is unsecured and the lender, Mr Chi, reserves the right to call for an early redemption of the outstanding loan amount by giving three months’ notice.

As announced previously, the Company’s working capital position has been constrained for a number of months. Following entering into the Loan Agreement, the Company expects to be able to meet its liabilities as they fall due until the end of October 2019. The Company continues to seek additional funding to safeguard its liquidity and whilst the Board is hopeful that these discussions will have a successful outcome, there can be no guarantee that the Company’s working capital position will be stabilised. In this instance, the Company may be unable to continue its operations and may be forced into liquidation with a consequential diminution in value to shareholders.

Mr Chi is a director of and substantial shareholder in the Company. Therefore, the entering into of the Loan Agreement constitutes a related party transaction under the AIM Rules for Companies. The directors of the Company, with the exception of Mr Chi, consider, having consulted with the Company's Nominated Adviser, that the terms of the Loan Agreement are fair and reasonable insofar as the Company's shareholders are concerned. 

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