StockMarketWire.com - Struggling animal feed provider Walcom once again warned that it could soon go into liquidation, having been unable to secure a promised loan from chief executive Francis Chi.

In the next of a long line of updates about the fragility of its capital position, the company said Chi had reiterated his intention to provide a HK$1.23m loan but that it still hadn't been forthcoming.

Walcom said a bank loan repayment date had been extended by its lenders until 19 June, back from the end of May.

'The company will require additional funding to satisfy the loan repayment due on 19 June 2020,' Walcom said.

'Therefore, based on Walcom's current cash flow projections, the company will be able to continue operations until 19 June 2020.'

'In the absence of the director loan now being received in part or in full by this date, the company would be unable to continue its operations and would be forced into liquidation with a consequential diminution in value to shareholders.'

In a trading update, Walcom also said that it expected its revenue for the year through December to more than halve to HK$15.1m, down from HK$34.7m, following an outbreak of African swine flu.

'The company has seen a gradual recovery of the swine market in China, whereby most of its customers have re-commenced ordering the company's swine feed products,' Walcom.

'Whilst the quantity per order is smaller than before, the company has observed a trend of more regular orders from customers.'

'The board is cautiously optimistic that sales of swine products in China will continue and hopefully accelerate during the fourth quarter of the current financial year.'

'Due to the combined effect of African Swine Influenza and Covid-19, Walcom has experienced a significant reduction in sales of its products in markets outside China which the Board expects will continue until the final quarter of the current financial year.'

'The company continues to develop its products for dairy cows in China, and the board anticipates that sales of these products will begin during the fourth quarter of 2020.'

At 8:57am: [LON:WALG] Walcom Group Ltd share price was -0.05p at 0.2p



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