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Woodbois Ltd shares plunged on Wednesday, after it said its lender, Sydbank AS, is terminating the $6 million debt facility of its wholly-owner subsidiary Woodgroup ApS. Shares in the Africa-focus forestry, timber and afforestation company were down 64% to 0.37 pence each in London on Wednesday morning. Over the past 12-months the stock is down 92% ‘The reason cited by Sydbank for terminating the facility was that Woodgroup ApS generated a loss in Q1 2023. Sydbank believe that, as a consequence, the circumstances of Woodgroup ApS have changed significantly to their detriment,’ Woodbois explained. Woodbois said it was ‘shocked’ by the decision, and will explore alternative funding sources. ‘Whilst it expects a difficult trading period in the short-term, management believe that the fundamentals of the business are sound,’ Woodbois affirmed. It believes the company is ‘well placed to deliver a very positive performance for the remainder of the year.’ Woodbois said that Woodgroup has ‘various’ banking arrangements with Sydbank, including the $6 million facility that was fully utilised and an ancillary account with a cash balance of $3.1 million. It added that Sydbank have a floating charge against the assets of Woodgroup and have offset this $3.1 million in partial repayment of the facility. As part of the notice, Sydbank has also requested the Woodgroup present a plan for the repayment of the outstanding $2.9 million. ‘Sydbank has verbally indicated that they would be open to working with the company to at least the end of May to allow the development of a plan to refinance the balance,’ Woodbois said. Woodbois has cash balances of $430,000 outside the Sydbank account and net trade receivables of $1.5 million. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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