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Amala Foods PLC on Friday warned of the ‘risk’ that it could fall into insolvency should new funding not materialise in the medium-term. The cash shell said it is currently relying on financing from a ‘relatively new’ convertible loan agreement with a ‘professional investor’. The loan is worth £100,000, with drawdowns made in agreement with the investor, Phillip Reid. The loan carries no interest and it matures in August of next year. Reid has nominated his son, Sam Reid, to be a non-executive director on the cash shell’s board. ‘The company has various debt obligations that are currently due for repayment. The company has entered into a new agreement with Riverfort, its largest creditor, on 8 October 2025 that has secured a standstill which prevents Riverfort requesting repayment of sums due to it before 7 October 2026,’ Amala added. ‘The company intends to seek similar standstill agreements with the holders of the other convertible loan notes that the company has issued. However, there is no guarantee that company will be able to reach an agreement with these lenders to give the company more time to repay them, if required.’ Amala said it is working to identify a target company to acquire, and also pursuing, with the investor, funding of around £250,000. This would be to meet costs of any transaction. ‘There can be no guarantee at this stage that the company will be able to identify a suitable target, that the company will be able to raise equity at a price acceptable to the board,’ Amala said. ‘The company continues to incur minimal overheads with the directors continuing not to receive or accrue any form of remuneration which has been consistent over recent years.’ Amala added: ‘If further funding is not available in the medium term and/or if debt holders were to request immediate repayment in cash then there is a material risk that the board would seek to place the company into an insolvency process which may lead to administration.’ Shares have been suspended since November 2023, when it announced the possible reverse takeover of Healthcare Medical Plus Pte Ltd. However, in July of that year, the deal lapsed. A transition period in listing rules meant firms with a market capitalisation above £700,000 were able to re-admit to the Official List of the London Stock Exchange, instead of a market cap above £30 million. ‘As the company’s proposed RTO with Healthcare Medical Plus Pte Ltd is unlikely to result in the company obtaining a market capitalisation of £30 million or more, the company has suspended the current RTO process with Healthcare Medical Plus Pte Ltd while the company weighs up its various options,’ Amala said at the time. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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