Engineering firm’s shares slump after investors warned of potential administration

Shares in automotive engineering company Torotrak have dived after the Leyland-based company warned investors that it may have to call in administrators.

As previously announced, the company’s ability to trade on a going concern basis was dependent on its ability to successfully realise value from its assets or find alternative sources of funding.

Torotrak said it has been actively looking to restructure the group and find potential acquirers of its technology, intellectual property and assets.

This has included the potential sale of Flybrid Automotive.

However, the company said that while progress has been made in certain areas, no final transactions have been concluded to date.

It added that on November 27, it received notice from backers Jonathan Hilton and Douglas Cross demanding immediate repayment of £1.7m pursuant to their understanding of the terms of the loan note agreement.

“The legitimacy of this notice is disputed by the company, “ Torotrak said. “ However, the uncertainty created by this loan note redemption notice has led to uncertainty surrounding the refinancing discussions. In the absence of a successful resolution of the refinancing position and/or the dispute with Mr Hilton and Mr Cross, the company will have to consider appointing administrators.

The company also said it is “highly unlikely” that the board will be in a position to publish its half year results for the six months ended September 30 2017 by November 30.

Shares in Torotrak were down 52% at 0.132 pence in early trade on the news.