SPAIN: Dogi rejects liquidity crisis, narrows losses
Struggling Spanish stretch-fibres company Dogi has rejected rumours that it is facing a liquidity crisis after a troubled share offering in August raised concerns about its financial health.
The announcement came after Dogi posted a EUR6.6m (US$9.46m) first-half loss, though 49% lower than last year's EUR12.9m.
EBITDA rose 50% to EUR7.1m showing that its new restructuring strategy is bearing some fruit. Revenues fell 7.3% to €65.5m.
"We are not facing or will have any liquidity problems in the future," a company insider said Friday, backing a regulatory statement filed on the CNMV stock market watchdog that defended the company's cash position.
During the problematic August capital offering, Dogi increased its cash/debt ratio 50%, he said, adding that other cost-cutting and restructuring initiatives will further improve the company's solvency in coming months.
The equity offering went disastrously for the company. Dogi had sought to raise EUR24m but ended up with only EUR4.2m. Following a EUR3.6m cash injection by the Domenech family owner, the company garnered only EUR7.6m.
Dogi said the offering was a success considering the difficult funding climate though and that the transaction's estimated costs fell to EUR200,000 from EUR500,000.
Dogi, which posted heavy losses last year, has been struggling to turn around its business for years, prompting many analysts to question its business model.
"This company has had to many share offerings already," said a Madrid-based analyst requesting anonymity. "We are not going to participate in anymore of them."
By Ivan Castano-Freeman.
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