Shares of Safestyle UK took a hit as the company announced its ongoing efforts to enhance its financial position. In pursuit of this goal, Safestyle UK is engaging with various stakeholders and interested parties.

As of 0931 GMT, shares were down 32% at 3.0 pence, representing a decline of 1.4 pence.

The door-and-window manufacturing company aims to raise funds to support its recovery and pave the way for future growth. However, it seeks an alternative financing structure rather than resorting to an equity placing for a working capital injection.

Safestyle UK currently anticipates its net debt at the year-end to range from £5.5 million to £6.5 million ($6.6 million-$7.9 million). Hence, utilizing the company's full line-of-credit with the bank becomes essential to meet working capital and liquidity requirements. However, if expected losses materialize, access to the line-of-credit could be impeded due to a potential shortfall against existing covenants in November.

In addition to exploring options for a working capital injection, Safestyle UK is also in discussions with its supportive bank regarding the renegotiation of terms for its revolving credit facility through a covenant waiver. The formal agreement for this is yet to be reached and is expected to be interdependent with the working capital injection.

Looking ahead, the company affirms its positive outlook on growth recovery prospects, emphasizing the presence of an aging housing stock in need of repair as a catalyst.

Earlier in mid-September, Safestyle's shares experienced a significant decline following a revision in its full-year guidance due to weaker demand. Consequently, the company reported a widened pretax loss and decided not to issue dividends as a result.

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