Struggling business lender Axsesstoday committed to a dividend – then cancelled it
Shareholders waiting for a 2.9c dividend from listed fintech Axsesstoday have woken up to news the company has cancelled it.
It’s the latest bit of sour news for Axsesstoday (ASX:AXL), which last month put itself into voluntary trading suspension after it lost its co-founder and chief.
Axsesstoday lends money to small-to-medium hospitality and transport businesses so they can buy equipment.
The business listed on the ASX in December 2016 after raising $10 million selling shares at $1 apiece.
The stock climbed as high as $2.60 in August before collapsing to $1.63 a month ago. It’s been suspended from trade ever since.
Axsesstoday told investors today “in light of recent events” it had decided to revoke the decision to pay the dividend to “instead focus on accumulating capital to support the debt facilities in place”.
The voluntary suspension was supposed to last until September 24 so the board could undertake “a detailed review of the company’s business strategy”.
It’s since asked the ASX for a further suspension extension until October 22.
An interim company update provided to the ASX revealed a change in reporting methodology had “inadvertently triggered a breach of its financial covenants with its senior bank lenders”.
That was one of a list of issues.
“Modifications to the corporate structure of the company by creating new entities within the group” were ticked off without consent of the banks, while $2 million in funding “in business loans through one of these new entities” was secured outside agreed terms, the group told investors in the ASX announcement.
“The company has been working closely with its senior bank lenders to obtain a waiver for the above mentioned breaches, to re-negotiate the covenant thresholds and to procure their ongoing support,” Axsesstoday said in a statement.
It has also successfully pleaded with Joe Flanagan, who quit in his roles as chief financial officer and company secretary in August, to reconsider his resignation.
The search for a new CEO, a board renewal and a review of company strategy are all underway.