WALG.L Regulatory News (WALG)

Walcom Group Ltd - Trading Statement

PR Newswire

London, June 27

28 June 2018

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")

WALCOM GROUP LIMITED

(“Walcom” or “the Company”)

Trading Statement

Walcom announces that the Company’s largest customer, based in the Henan province (the “Customer”), has defaulted on a payment owed to the Company of RMB 2 million (approximately £230,000). The Customer has informed the Company that it is in the process of a refinancing which has resulted in its inability to make the payment in accordance with the agreed terms of service and that it expects to settle the payment by 10 July 2018. The Company is confident that the payment will be received but further delay may be possible.

A further RMB 4.66 million (approximately £540,000) is owed to the Company by the Customer which has not yet fallen due for payment. There is currently no suggestion that there will be any delays with receipt of these monies.

The delay in receipt of the current payment, in conjunction with the challenging trading conditions seen in the first half of the financial year, has had a material adverse effect on the Company’s cash resources. If the full amount outstanding from the Customer is not received, the Company might, in the absence of obtaining alternative funds, be in a position where it is unable to settle its liabilities as and when they fall due. The Company is considering alternative financing arrangements, should any be considered necessary.

The Board has reserved all rights in relation to Walcom’s ability to seek legal redress.

As at 22 June 2018, the Company had cash at bank of approximately HK$ 3 million. As at 22 June 2018, the Group had two short-term bank loans of RMB 2 million each, being RMB 4 million in total (HK$4.8 million), and two short-term loans amounting to an aggregate of HK$0.5 million from minority shareholders of its subsidiary in Thailand, both of which were used to finance the Group’s general working capital. In addition, as announced on 14 February 2018, a secured three-year RMB 2 million revolving credit facility is in place via its wholly owned subsidiary Shanghai Walcom Bio-Chem Co., Ltd. The revolving credit facility is subject to review every three months.

The Company is closely monitoring its cash position.

A further announcement will be made in due course.

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