Embattled Africa Cellular Towers (ACT) is still in discussions in a bid to secure funding, a process it embarked on last November.
The company yesterday reiterated a cautionary announcement that it first posted on 17 November and said its funding requirements had not yet been finalised. The cautionary has been repeated three times since November.
In its November trading update, ACT warned that it was in strategic discussions “regarding its going concern prospects, as well as funding requirements”.
Its results for the six months to August, published in December, indicate it has not been able to turn around its loss-making position.
In the first half of the year, the group turned over R109.2 million, compared with R102.8 million in the first half of 2010. It reported a net loss of R54.7 million, which was an improvement on the previous R85.5 million loss.
Concerning outlook
ACT was established in 1999 and provides power lines, cellular towers and other products. In the year to February 2011, it recorded a R102.7 million loss from revenue of R202 million.
In December, the firm said its outlook was “strained by the inability to secure sustainable long-term contracts within the power lines industry, the depressed trading environment, as well as the working capital constraints being experienced by the group”.
It had been successful in securing cellular construction deals in SA and is seeing a “general improvement” in the unit.
However, ACT said it may face some “tough decisions” unless there is a short- to medium-term improvement in the power lines division, restructuring of current funding and/or an equity deal to recapitalise the business.
ACT said it needed to restructure its costs, refinance certain operations and/or secure additional funds in order to honour its commitments and have sufficient capital to operate.
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