Woodbois - $6m lending facility being withdrawn, will the company survive, shares collapse 65%
Investors are now questioning whether Woodbois (LON:WBI) will survive one of its lenders asking for its money back?
The £9m market capitalised business is involved in Africa-focused forestry, timber trading and afforestation.
Sydbank, which has provided various banking arrangement to Woodgroup ApS, a group wholly owned subsidiary, has called in the $6m debt facility.
Having a floating charge against the subsidiary assets, which include a $3.1m cash balance, Sydbank has heavy power against the company.
The cash will be immediately used to offset part of the $6m facility.
Woodbois has until the end of May to come up with a method or a scheme for the repayment of the $2.9m balance.
The group’s broker Canaccord Genuity has placed its rating on the group’s shares as “Under Review” so that worries investors even more than the sudden totally unexpected cash demand.
Restructuring advisers have been called in and the group is undertaking a “concerted contingency planning exercise” - understandably in reaction the group’s shares have collapsed this morning by some 65% to 0.36p after hitting 0.22p earlier.