Investment Research Group borrows money off CEO, talks to banks about trimming payments

Tuesday 11th May 2010

Investment Research Group, the advisory and brokerage firm, has borrowed funds from managing director Brent King and may have to ask him for more to meet its outgoings, chairman Bill Birch said.

At the same time, the NZAX-listed firm plans to approach its banks to reduce the amount of principal repayments it is required to make and to discuss its financial ratios “since we have very little head room in our interest cover ratio.”

“It has been a difficult year” Birch said in a statement today. “Our net cash from operations is between positive $15,000 and negative $50,000 per month depending on the trading volumes each month.”

Shares of IRG last traded at 1 cent, giving the company a market capitalisation of $2.4 million, and have shed more than 90% of their value in the past three years.

King has made an unsecured loan of about $120,000 to the company, which “anticipates that it might seek further support from him and other sources in the short term,” Birch said. Earnings from operations in the year ended March 31 was $175,000 though this was a provisional assessment and “may be impacted adversely by write downs in the carrying values of assets.”

King said the company is “reviewing all options” to lift its trading performance, including delisting its shares to reduce costs, further capital raising or even acquiring businesses.

Businesswire.co.nz

Comments from our readers

No comments yet