Nature Group tumbles on cash concerns, struggles to offload oil treatment arm

Nature Group’s shares plummeted almost 30% on Wednesday as the company said its overall financial position "remains uncertain", which it is looking to remedy with the disposal of its oil and gas business.

The environmental waste management group reports that it is in advanced discussions regarding the sale of Nature Oil & Gas after trial agreements and negotiations in late 2017 failed to yield contracts, thus putting the company’s cash flow under pressure. The division provides an offshore slop treatment process that can treat all liquid waste produced on a rig from drilling slop to brine/seawater and wastewater.

Berend van Straten, chairman of Nature Group, said: “There is much more work to do to ensure Nature Group has a viable future, and the proposed sale of the Oil & Gas division is a vital step in achieving that and to addressing the Group's urgent, short-term cash requirements.”

Nature Group’s cash position has been recently improved by the $1.6m sale of 50% of its consideration in US subsidiary Nature Environmental & Marine Services to Ramky Enviro North America in November.

Despite this, a statement from the AIM-traded company acknowledged that “the overall financial position of the group remains uncertain,” and stated that the company had secured a verbal waiver from its lender DNB to defer the repayment of lease and debt financing facilities of $1m until the end of April.

This waiver is conditional on the proposed sale of Nature Oil & Gas, with the risk of serious liquidity constraints if the sale is not concluded prior to the end of April.

With the planned sale of its oil and gas subsidiary, Nature Group is increasing its focus on its maritime division and has enhanced operational margins after the implementation of new operational measures.

“We are encouraged that steps taken by the board during the period to identify the operational and structural issues problems and to define and begin to implement a new strategy are beginning to yield positive results,” said van Straten.

As of 0951 GMT, Nature Group’s shares were down 29.41% at 3.00p.