K3 Business Technologies Group has said it is to file a notice of intention for administration for its UK dynamics subsidiary.
The Manchester-based software company said K3 Business Technologies Limited, which is a re-seller of Microsoft Dynamics, generated an operating loss in excess of £3m on turnover of £21m for the 12 months to November 30, 2019.
Given uncertainties as a result of the coronavirus, it is expected to generate further significant negative EBITDA and cash outflows in the year to November 30, the group said.
It said the decision has no effect on the group’s Microsoft Dynamics practices outside the UK.
In the update, the group also announced it secured additional cash funding of £6m from Barclays Bank and two major shareholders - Kestrel Partners and Johan Claesson, also a non-executive director.
The group said the cash will strengthen its liquidity during the disruption caused by the coronavirus epidemic.
Barclays extended its existing loan facilities to K3 by £3m to a maximum of £13m in total.
Meanwhile, Kestrel and Johan Claesson provided an unsecured-term loan of £3m - split equally between the two lenders - until June 30, 2021.
Adalsteinn Valdimarsson, CEO of K3 Technology Group plc, said: "The securing of this additional finance from Barclays and our two major shareholders demonstrates their commitment to K3 and belief in our growth strategy and prospects.
“The additional liquidity puts us in a much stronger financial position and gives us the headroom to undertake any required restructuring as well as further investment to support our growth strategy."
