Receipt of initial customer payment

3 September 2018

WALCOM GROUP LIMITED

(“Walcom” or “the Company”)

Receipt of initial customer payment

Further to the Company’s announcements regarding the default on payments by the Company’s largest customer (the “Customer”), Walcom is pleased to announce it has now received RMB 300,000 (approximately £34,120) from the Customer.

A further RMB 5.56 million (approximately £632,366) is owed and due for payment by the Customer. An additional RMB 0.8 million (approximately £91,988) will fall due between now and mid-September 2018.

The Company has begun legal proceedings to recover the contractual monies due but is negotiating with the Customer for settlement of the outstanding amounts and hopes to reach agreement outside court. 

As previously announced, the Company’s working capital position is significantly restrained but manageable in the near term. The Company has continued to maintain at least the minimum level of working capital required, however, this requires receipt of other ordinary course trade receivables on a timely basis. With the seasonal cyclicality the Group experiences, the Board is hopeful that trading in the coming months will improve the cash position.

If the full amount outstanding from the Customer is not received, the Company might, in the absence of obtaining alternative funds, be in a position where it is unable to settle its liabilities as and when they fall due. The Company is considering alternative financing arrangements, should any be considered necessary.

The Company is closely monitoring its cash position and will make a further announcement as necessary.

Further enquiries:

Walcom Group Limited Francis Chi (Chief Executive Officer) Albert Wong (Chief Financial Officer)	[phone]
Allenby Capital Limited Virginia Bull	[phone]