E-Force facing financial woes
By Phil Boeyen, ShareChat Business News Editor
Just weeks after listed tech company E-Force (NZSE: EFC) said it was closing its online portal the company has announced it is facing tough financial times and is working on a New Year restructuring proposal to put to its bankers, creditors and shareholders.
The company appears to have been caught in a rental squeeze, with head lease rentals and other related costs substantially exceeding income from sub-tenants.
Chief executive, Bill Farmer, says the problems are mainly a result of the losses by the company's portal operations and the continuing overhead burden of leases entered into by companies in the E-Force Group some years ago.
"Whilst there has been provision in the company's accounts for these lease obligations, cash constraints arising from the shortfall in income means they can not be met."
"The cumulative effect of these, along with expansionary expenditure and one off foreign exchange losses was such that E-Force is unable to continue as presently structured."
It is expected that the restructuring of the E-Force Group will in part be funded from profits generated by importing services company, Product Sourcing International.
E-Force closed its online portal last week to focus on PSI, which provides importing services such as quality control, freight and import and export documentation to large retailers.
PSI was acquired in June this year, with E-Force issuing 36 million new shares as payment. Mr Farmer says it is business as usual for PSI, which is not directly affected by the problems of other companies in the group.
E-Force was formerly South Island sawmilling company Paynter Timber, which changed its name and business direction last year to focus on the tech sector, mainly through its online portal of the same name.
The website aimed to build an e-commerce cooperative, offering a large member-base opportunities to save money on products and services.
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