Vis­ual In­ter­na­tional ex­pects its cash-flow con­straints to ease

Pretoria News - - NEWS - Roy Cokayne

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.

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