Visual International expects its cash-flow constraints to ease
VISUAL International, the AltX-listed property development firm, expects its cashflow constraints to improve following the finalisation of a funding agreement with Milost Global for equity and debt funding of up to R500 million.
However, the group said yesterday that the previously reported cash-flow constraints remained, but the situation had improved and would continue to improve because of the Milost Global transaction.
It said the first equity draw down by the group was received from Milost on November 17.
The cash-flow constraints resulted from the group’s inability to generate revenue from property development and sales.
The Milost agreement was divided into two parts, a R150m equity draw down facility for the subscription of shares in Visual at a 50 percent premium to the five-day volume-weighted average share price for each draw down and a R350m convertible debt facility.
Effective from March 1 this year, Visual acquired 31.2 percent of Mosegedi and Associates, which was involved in developing affordable housing for provinces and the government.
However, Visual said the group and Mosegedi’s major shareholders had agreed not to proceed with phase two of the acquisition of 18.9 percent of Mosegedi because the audit of Mosegedi’s financial statements was incomplete.
Visual said its management had decided to impair the full Mosegedi equity accounted income of R1.26m and the management fees and reimbursements receivable that were overdue.
Yesterday the group reported an improved financial performance for the six months to August. It attributed this to an increase in investment income and a decrease in operating expenses and finance costs through the sale of certain group properties and applying the proceeds towards debt repayment.
Visual also said it had received management fees from its Mosegedi associate.
The group reported a reduction in the total comprehensive loss to R3.95m for the six months to August from the R8.89m loss in the previous corresponding period.
The headline loss a share narrowed to 1.22c from 3.54c. Revenue slumped almost 73 percent to R3.02m from R11.08m.
The operating loss improved to a loss of R1.63m from the R11.7m loss in the prior period.
Operating expenses fell 56 percent to R5.8m from R13.1m. A dividend was not declared. Shares in Visual closed unchanged at 7 cents yesterday.