ACTowers in battle for funding

Africa Cellular Towers (ATR), the struggling JSE-listed provider of telecommunication infrastructure, says its funding requirements are not yet finalised.

In December, the group said that, despite an extensive turn-around process and debt funding from the Industrial Development Corporation (IDC) to R99 million – macro-economic factors, and continued depressed trading conditions, negatively impacted on its results for the six months ended August 31, 2011 – which failed to the Board’s expectations.

“Various restructuring options are currently being implemented by the group in order to restore the company to profitability. Should these options not be successfully concluded, there will be material uncertainty created with regards to its going concern status,” the group said in a statement at the time.

In January, it advised its shareholders to continue exercising caution when dealing in its shares, amid on-going funding negotiations.

ACTowers noted that its cellular towers division had been successful over the reporting period in securing some contracts within South Africa as well as Ghana, “but not to the levels previously reported”.

Revenue climbed to R109.2 million, while the group recorded a trading loss of R47.6 million.

“As a result of the working capital requirements of the group, ACTowers is currently in strategic discussions with the IDC and its bankers regarding the re-negotiation of existing and further funding facilities,” it said in December.

The group said that its outlook was strained by the depressed trading environment, as well as the working capital constraints. It added that its ability to continue on a going concern basis was dependent on the restructuring of the group, and its funding requirements.

ACTowers said it had applied to the IDC to restructure its financing facilities, pointing out that it did not aim to increase the facilities of R99 million, but hoped instead to restructure the facilities to increase the working capital funding from the asset-based financing facility.

It said that it had only utilised R34.4 million at the end of August 2011, and R39.96 million at the end of November 2011. The firm said it also hoped to increase liquidity by utilising increased banking facilities.

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ACTowers in battle for funding