Field Solutions Holding Secures Working Capital Amid Capital Raise Plans
Field Solutions Holding Ltd reported a positive net cash flow from operations for the December quarter but faces significant investing outflows and is currently in voluntary suspension pending a capital raise.
- Net cash inflow of $1.68 million from operating activities in Q4 2024
- Significant investing cash outflows totaling $2.71 million for the quarter
- Secured $1.1 million working capital facility from Kestrel Structure Capital Fund
- Company in voluntary suspension while finalising a $6 million to $8.6 million capital raise
- Operational restructuring underway to sustain cash flows and meet business objectives
Quarterly Cash Flow Overview
Field Solutions Holding Ltd (ASX: FSG), a player in the telecommunications network infrastructure sector, released its Appendix 4C quarterly cash flow report for the period ending 31 December 2024. The company reported a net positive cash flow from operating activities of $1.68 million for the quarter, signaling some operational resilience despite ongoing challenges.
However, the company’s investing activities showed a significant cash outflow of $2.71 million, reflecting continued capital expenditure and investment in non-current assets. Financing activities contributed a modest net inflow of $79,000, primarily from borrowings, offset by repayments and transaction costs.
Capital Structure and Financing Facilities
Field Solutions Holding currently holds loan facilities totaling $21.37 million, including a $13 million debt facility from Regal at 9% plus base rate, maturing in mid-2025, and a $1.1 million working capital facility from Kestrel Structure Capital Fund at bank base rate plus 10%. The Kestrel facility, secured as second ranking, was finalised in early October 2024 and is aimed at supporting working capital needs.
The company is presently in voluntary suspension from trading as it finalises a capital raise targeting between $6 million and $8.6 million. This capital raise is critical to bolster liquidity and support ongoing operations amid the current cash flow dynamics.
Operational Restructuring and Future Outlook
Field Solutions Holding has indicated that it expects to sustain its current level of net operating cash flows through an ongoing operational restructure. The company remains confident in its ability to continue operations and meet its business objectives, contingent on the successful completion of the capital raise and the flexible working capital facility.
The cash and cash equivalents at the end of the quarter stood at $1.75 million, with no unused financing facilities available, underscoring the importance of the capital raise to extend the company’s runway.
Investor Implications
Investors should note the company’s proactive steps to secure additional funding and restructure operations, which may stabilize cash flows in the near term. However, the reliance on external capital and the voluntary suspension highlight ongoing financial pressures that require close monitoring.
Bottom Line?
Field Solutions Holding’s near-term stability hinges on its capital raise success and operational restructuring progress.
Questions in the middle?
- What is the timeline and likelihood of completing the $6 million to $8.6 million capital raise?
- How will the operational restructuring concretely impact future cash flows and profitability?
- What are the risks if the company fails to secure additional funding beyond the working capital facility?
