Safestyle UK PLC (AIM:SFE) said it is actively engaging with existing shareholders and third-party investors to secure a working capital injection designed to stabilise its financial position.
The PVCu replacement windows and doors specialist stressed that any injection of new funds won't involve an equity placing.
Discussions thus far with potential funding providers were described as productive and are "ongoing".
Financially, Safestyle anticipates its year-end net debt to fall between £5.5 million and £6.5 million.
To meet its working capital and liquidity needs, the company will fully utilise its revolving credit facility (RCF) with its banking partner through early January 2024.
While Safestyle remains compliant with the covenants of its £7.5 million RCF, a material shortfall could arise if projected losses for the remainder of the year materialise. This could potentially restrict access to the RCF under the current terms.
In light of this, the board has also been in constructive discussions with its bank to renegotiate the terms of the RCF, possibly through a covenant waiver. This renegotiation is expected to be inter-conditional with the aforementioned working capital injection.
The shares opened 13% lower at 3.84p.