Working Capital Update

    RNS Number : 6889H
  ZTC Telecommunications plc
  07 November 2008
   
    7 November 2008

    ZTC Telecommunications plc
    ("ZTC" or the "Company")


    Working Capital Update 

    Following the trading update made by the Company on 13 October 2008 the Board wishes to announce that it has concluded two reseller
agreements whereby it will receive 80% of the value of prepaid components held by two suppliers when such components are sold on by the
suppliers to a third party. As previously stated, the working capital available to ZTC to operate and expand its business has become
constrained. By selling certain non-essential assets the Company is able to generate cash.

    The components are likely to be sold in tranches over the next two months and the first tranche is expected to be sold shortly. The
total value of the components being resold is �1,668,000. Therefore, should all of the prepaid components be sold on under these agreements,
the maximum loss that will be incurred by ZTC will amount to approximately �333,000 and the maximum cash generated by ZTC will be
�1,335,000. If any of the components are not sold on they can be utilised by ZTC for the production of its own handsets over time.

    Frank Lewis, Chairman commented:

    "We are demonstrating that we are actively addressing the working capital issues in our business by reducing prepayments. We will
continue to respond to challenging market conditions in order to position the Company to take advantage of future opportunities."  

    Contact information:

    ZTC Telecommunications plc
    Mark Syropoulo, Finance Director
    +86 21 6867 0012
    Frank Lewis, Chairman
    +44 20 7429 6666

    Fairfax I.S. PLC
    Nominated Adviser & Broker
    Adam Hart/Laura Littley
    +44 20 7598 5368

    Conduit PR
Jos Simson/Ben Way
    +44 20 7429 6609


This information is provided by RNS
The company news service from the London Stock Exchange
 
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