African Battery Metals PLC (LON:ABM) said it intends to approach all of its existing creditors and suppliers with a view to negotiating a settlement of all of the company's existing liabilities on equal terms, in order to give the group the time to seek other solutions for the continuation of its trade.
In a statement following the suspension of trading in the AIM-listed African focused exploration company’s shares on Tuesday, said it was “very disappointed” to announce that, despite protracted discussions over many weeks with its largest shareholders, it has been unable to secure equity finance from these shareholders on any terms.
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The company added that, given the current adverse market conditions for junior resource exploration companies and after consultation on alternative sources of finance with its professional advisers, it has concluded that other sources of equity capital are not currently available to the company.
ABM said should it be able to reach an agreement with its creditors, its directors anticipate that this will necessitate the issue of new shares in the company in settlement of amounts due.
The firm added that none of ABM's employees and directors will draw salaries and fees until further notice.
The group said: “In the current circumstances, the Directors believe that this approach will deliver the best available outcome to its stakeholders.”
But it added: “Should the Company be unable to reach a satisfactory settlement with its creditors, ABM will be at risk of being unable to continue to trade as a going concern.”
Trading in ABM’s shares was suspended at 1.35p each earlier on Tuesday pending clarification of its financial position.