Ambrian PLC (LON:AMBR) topped the market’s casualty list today, with its shares plunging over by 31% after the Africa focused cement firm and metals trader flagged up short-term liquidity issues due to difficulties in moving cash resources.
In early afternoon trading, Ambrian shares were down 31%, or 0.63p at 1.38p.
In a trading update released this morning, the AIM listed firm said that, operationally cement sales volumes from its operations in Beira, Mozambique were 20% higher in the third quarter than the second quarter, but were 16% lower than the third quarter of 2016.
The group added that general economic conditions in Mozambique have been "very challenging" over the last twelve months, however, it said the construction sector has seen improvement, and the fourth quarter of 2017 has been very strong so far.
Ambrian said it expects 2017 sales to be 25% higher than 2016, with cement prices improving year-on-year and the Beira plant generating positive underlying earnings (EBITDA).
Urgent short-term liquidity issues
However, financially, the group said it is facing with urgent short-term liquidity issues, and anticipates that short-term, external financing will be needed for the company to continue meeting its obligations.
Ambrian added that it is currently in discussions with potential parties to secure short term financing and a longer-term strategic partnership and investment for the group to reduce debt and develop its principal asset in Mozambique.
The UK company said it is also in discussions with its senior management that holds convertible loan notes issued in October 2015, on deferring the interest payment due for the period from July to December, which is due to be paid in December.
It added that the review by Verdant Capital, an African corporate finance specialist, to assess strategic options for the company's cement operations – announced on 31 July 2017 - is ongoing.