- Frontier said it would implement a revised version of its mitigation plan as soon as possible to rein in costs to ease the pressure on its cash flows and credit facilities as the group sought to meet covenant testing measures in the near term.

The urgency to rein in costs comes as the company flagged a $450,000 hit to profits expected in the second half of the year as professional advisory fees largely incurred in managing ongoing discussions with Science Group weighed on cash flows.

Covenants on the company's credit facility with Clydesdale Bank were forecast to be met in the near term, the company said. The June covenants testing were met and the September covenants testing were also expected to be met.

As well as Science group, Frontier also received an approach from a credible industry player with a view to executing a corporate transaction, which was also subject to detailed consideration by the board, the company said.

The company said while these deliberations were underway the mitigation plan was put on hold, so as to preserve options while it reviewed and explored potential synergies between the company and the two potential partners.

But given Science Group's stated intention to maintain a significant minority shareholding and the lack of timely traction with the industry player, it is clear that Frontier would continue to operate as an independent entity for the foreseeable future, the company said.

'The delay to the mitigation plan, coupled with the additional advisory fees incurred in connection with the ongoing corporate activity, increase the risk to Frontier's current credit facilities and place further pressure on Group cash flows,' it added.

'The Board now intends to take action on cost mitigation and potential restructuring by implementing a revised version of the mitigation plan as soon as possible, so as to preserve Group outlook for FY20.'

At 8:38am: [LON:FST] Frontier Smart Technologies Grp Ltd share price was -3.5p at 27.5p

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