The auditors of the AGS Transact Technologies have given an adverse report to the company and raised concern over the ability to continue its business due to ongoing crisis after the third quarter results, as per the auditor’s report.
The report said the management's plan to generate cash flow from recovering outstanding receivables, equity issuance and stake sale in subsidiaries along with deferment of future cash outflow by restructuring borrowings is not supported by sufficient and appropriate evidence.
“These conditions indicate that a material uncertainty exists that may cast significant doubt on the entity’s ability to continue as a going concern,” auditor’s report said.
On February 14, Moneycontrol reported that the lender to the company is expected to classify it as a non-performing asset (NPA). Should that happen, AGS Transact may face the threat of insolvency.
AGS Transact is promoted by Ravi Goyal, who holds a 60.5 percent stake, and the company is among India’s largest players in the cash management space. Despite a 15 percent market share in the business, it is at the brink of a collapse, according to people familiar with the matter.
About 10 percent of Goyal's holdings in the company is pledged with lenders.
According to a Crisil report, AGS Transact’s network spanned around 3,800 ATMs and cash recycler machines (CRMs) as of March 31, 2024. The company and its subsidiary Securevalue India (SVIL) defaulted on repayment obligations for certain outstanding borrowings due to liquidity issues.
AGS Transact has defaulted/delayed in certain loan repayments, GST registrations in certain states have been suspended/cancelled and there have been continuing delays in payment of statutory dues, employee salaries and vendor payments, the Crisil report has said.
India Rating has downgraded AGS Transact’s term loans worth Rs 567 crore and Rs 193.8 crore of working capital loans (mix of long and short-term facilities), while Crisil has downgraded bank loan facilities worth Rs 900 crore.
The company reported a consolidated net loss of Rs 194.26 crore in Q3FY25, compared with a net loss of Rs 15.38 crore in Q3FY24.
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