News Column

Shaft Sinkers Shares Surge As It Gets GBP3.5 Million Loan Facility

August 22, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Shares in Shaft Sinkers Holdings PLC surged Friday after it said that Hillside International Holdings Ltd has agreed to provide the company with a non-interest loan facility of GBP3.5 million, which will give it enough working capital to secure a funding package to meet its longer-term financing needs.

The shaft sinking and underground construction group said it has started preparations to raise up to GBP9.2 million via a proposed issue of convertible loan notes, so it can use the capital for longer-term financing requirements and to repay the Hillside loan.

In July, Shaft Sinkers had warned that it had started talks with various parties about securing urgent funding to meet its short-term needs, after trading continued to be difficult and its cash position further deteriorated, putting its future in doubt.

It had warned in May that its operations and cash flow were being hit by the strikes that brought the South African precious metal mining industry to a halt for five months. At that time, the company said it had started selling assets and further cutting overheads due to the tightening cash situation.

The South African strike, which hit the platinum mining operations of Lonmin PLC, Anglo American PLC, and Impala Platinum Holding PLC, ended in June, but that didn't stop Shaft Sinkers' cash position from deteriorating further.

Shaft Sinkers shares were up 32.9% Friday midday, at 9.97 pence, the second-biggest rise on the London main market and the stock's highest level since it plunged after the July warning about its funding needs.

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Source: Alliance News

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