Hospitality group Silver Chef (ASX: SIV) has released its audited FY19 results, and the loss is worse than the group initially anticipated.
Silver Chef has posted a FY19 statutory net loss after tax of $64.9 million, down from the anticipated statutory net loss of $18.6 million it announced in unaudited final results back in August.
The company now says that if the proposed acquisition by Next Capital of its hospitality business falls through then there is significant uncertainty it will be able to continue and may have to sell off assets at a discount to settle liabilities.
Silver Chef says the loss is primarily driven by costs associated with the implementation of a capital management plan, a deliberate reduction in hospitality originations, restructuring costs and additional provisioning arising from changes to the company's credit management policies.
Revenue during FY19 was $235.4 million, down from $287.1 million in FY18.
The loss comes as the company has just confirmed its agreement with investment group Next Capital who hopes to acquire the entirety of Silver Chef's hospitality business.
If the acquisition is successful, Silver Chef will be left with the embattled GoGetta business which it intends to wind down.
Last week the company said it effectively had no choice by to accept an $18 million offer for its hospitality business due to its considerable and almost-due financial obligations.
If the Next Capital deal is not accepted, Silver Chef will be unable to pay its outstanding financial obligations.
Those obligations with Westpac, CBA, ANZ and HSBC have been extended yet again, this time until 30 November 2019.
The deal with the banks is conditional on completion of the sale of the hospitality business to Next Capital. If that falls through the company warns of a bleak future for Silver Chef.
"Should shareholders vote against the Sale of the Hospitality Business and after a 15 day negotiation period the Company and the financiers are unable to agree on a viable alternative proposal, then the Group's financiers will have the right to seek repayment of the Group's outstanding borrowings," says Silver Chef.
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