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Vending machines operator Uvenco tanks as cash runs out
Vending machine operator Uvenco is looking into selling off parts of its business as it warned that cash levels has become perilously low.
The AIM-listed company, in which Russian-US citizen Boris Belotserkovsky has a 53.9% controlling stake, has endured negative cash flow in recent months as efforts keep a handle on costs have not been able to offset a continued decline in sales since interim results over the last few years.
Having nearly drawn down the entire £1m loan facility that was agreed with Belotserkovsky's Cleitus Investments last June, various options are being reviewed by the board, which is led by chief executive Sergei Kornienko, chairman Jeremy Hamer, the former VCT investment manager, and non-executive director Michael Jackson of Elderstreet. Hamer's Unicorn has a 12.4% stake and Elderstreet has a 6.7% stake.
Discussions with an unnamed third party "may lead to the sale of its trading subsidiaries", namely the UK-based vending operator Uvenco Limited and franchise business Snack in the Box Limited.
"It is expected that the purchaser would also assume a substantial proportion of the company's debt obligations, therefore it is likely that the consideration receivable by the company will be minimal," Uvenco warned, adding that any sale would be subject to shareholder approval.
If no sale is agreed, directors cautioned that steps to protect the position of creditors -- namely Belotserkovsky's Cleitus -- would be unlikely to result in any value for equity shareholders.
Uvenco was floated in 2007 as Snacktime and was approached about a possible takeover by Belotserkovsky's Uvenco in February 2014, which was called off in favour of a June purchase of 3.8m shares for £0.57m by a UK-based Versatel vehicle instead, where Belotserkovsky and one Oleg Chulkov are directors. On top of a 7.3% stake that Belotserkovsky already owned, this giving him a stake of 26.14%.
Belotserkovsky took his stake up to 53.9% with the purchase of 12m shares for a gross £1.8m in October 2014, which after further share issues as part of a financial restructuring in summer 2015, rose to 67.6% including Belotserkovsky and other connected 'concert party' partners, before a December restructuring saw that reduced to 54%.
Last summer Belotserkovsky's Cleitus provided a £1m loan at a fixed interest rate of 8% per annum on sums drawn, payable quarterly in arrears in cash, repayable in four equal quarterly instalments, beginning 30 September 2019.