According to the Zhitong Finance App, Kexuan Power Holdings (00476) announced that on March 12, 2024, the company signed a loan agreement with S.C.I. SATO EV (lender) to provide a loan of 594,300 euros (equivalent to about HK$5.082 million) for a period of three months from the date of the loan.
Although the company continues to guarantee its working capital by requiring customers to pay a deposit before starting production of any purchase order, due to the cautious economic climate and current high interest rate environment, the Group's customers have postponed purchase orders to maintain working capital, putting pressure on the Group's working capital. Among them, as at 31 January 2024, the Group's cash and cash equivalent balance was approximately HK$2,117 million.
However, due to the recent poor investment climate, the company faced difficulties in seeking financing opportunities to supplement working capital. Therefore, the company believes that loans can provide the Group with short-term working capital to maintain operations while continuing to negotiate and finalize any fund-raising opportunities. The total amount of loan proceeds is intended to be used as the company's general working capital.