Kazera secures financing to see it through to cash generation

Investment company Kazera Global announced new financing arrangements on Wednesday, that it said would see it through to cash generation over the next six months.

The AIM-traded firm said it consisted of a new loan facility, which would allow it to draw down up to £0.25m over the next six months, with sums advanced by Westleigh Investments to be converted into a term loan on the same terms.

Deferred director salaries of more than £0.13m had also been converted into term loans on the same basis, but subordinated to the above.

The company said it expected that all of its existing operations would be trading profitably before the end of 2021, and further expected being cash flow positive in early 2022.

Within six months of the mining permit for the Heavy Mineral Sands operation being granted, Kazera said it expected to “substantially boost” positive cash flow generation.

The firm said the loan facility was being put in place to cover any cash flow shortfalls during the next half-year.

“This new facility, together with the conversion of the current director advances into a fixed term loan, will provide the company with a cash buffer to overcome any short-term cash issues which might otherwise have hindered its route to profitability and cash generation,” said chief executive officer Dennis Edmonds.

“There are a number of hurdles to jump before starting to generate serious cash flow, and we now have the resources to do that.”

Edmonds said that generating cash from early next year would mean that the company could fund its own future expansion, and that it would only look to additional funding if it was on terms that substantially improved its prospects.

“Particularly exciting for me is not the fact that we anticipate soon being cash generative, but that we have such enormous potential within our existing operations to build the company into a genuine success story.”

At 1437 BST, shares in Kazera Global were up 6.49% at 1.31p.