Social housing group Connaught (LON:CNT) has asked for its shares to be suspended and warned it may be unable to get extra funds from its lenders. The company agreed a short term overdraft facility in July and since then has been holding talks with its lenders and other sources of finance in an attempt to secure additional funding and a restructuring of the group's financing for the longer term. But Connaught now believes that the availability of additional funds from its lenders will not be forthcoming and, while it remains in discussions with other parties, "the ability to provide an adequate solution to the funding issues the group faces has become increasingly uncertain".
In August, Connaught warned that it was on course to record a material loss at an EBITA level (including current year exceptionals) and would be no better than breakeven at an adjusted EBITA level for the current financial year to August 31, 2010. At the time, it said it was also anticipating having to make provision for future losses on current contracts and write-downs on assets in its full year results. Today it said it had asked for its shares to be suspended pending clarification of its financial position.
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