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ZTC Telecoms plc (ZTC)

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Friday 07 November, 2008

ZTC Telecoms plc

Working Capital Update

RNS Number : 6889H
ZTC Telecommunications plc
07 November 2008
 

7 November 2008


ZTC Telecommunications plc

('ZTC' or the 'Company')



Working Capital Update 


Following the trading update made by the Company on 13 October 2008 the Board wishes to announce that it has concluded two reseller agreements whereby it will receive 80% of the value of prepaid components held by two suppliers when such components are sold on by the suppliers to a third partyAs previously stated, the working capital available to ZTC to operate and expand its business has become constrained. By selling certain non-essential assets the Company is able to generate cash.


The components are likely to be sold in tranches over the next two months and the first tranche is expected to be sold shortly. The total value of the components being resold is £1,668,000. Therefore, should all of the prepaid components be sold on under these agreements, the maximum loss that will be incurred by ZTC will amount to approximately £333,000 and the maximum cash generated by ZTC will be £1,335,000. If any of the components are not sold on they can be utilised by ZTC for the production of its own handsets over time.


Frank Lewis, Chairman commented:


'We are demonstrating that we are actively addressing the working capital issues in our business by reducing prepayments. We will continue to respond to challenging market conditions in order to position the Company to take advantage of future opportunities.'  


Contact information:


ZTC Telecommunications plc

Mark Syropoulo, Finance Director

+86 21 6867 0012

Frank Lewis, Chairman

+44 20 7429 6666


Fairfax I.S. PLC

Nominated Adviser & Broker

Adam Hart/Laura Littley

+44 20 7598 5368


Conduit PR
Jos Simson/Ben Way

+44 20 7429 6609



This information is provided by RNS
The company news service from the London Stock Exchange
 
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