Sondrel shares plunge after payment delay; Staff to defer wages

28th Dec 2023 15:49

(Sharecast News) - Shares in Sondrel plunged by more than a third on Thursday after the UK semiconductor designer asked staff to defer wages, because of a contract payment delay.

The company said it was unable to make December payroll in full after £1.7m of payments from a "Tier 1 automotive" manufacturer, under a contract to design an application specific integrated circuit (ASIC), were hit by an unexpected delay and are now expected to be received during January and February 2024.ll.

Sondrel designs ASICs and System on Chips (SOCs) products for high-performance computing, automotive, artificial intelligence, virtual reality, video analytics, image processing, mobile networking and data centers.

Directors and senior management agreed to defer salaries and fees until the delayed funds are received, and asked certain employees to defer on the same basis, with more than two-thirds agreeing to full deferral, with a significant additional number agreeing to partial deferral, the company said in a statement.

It added that it would need additional resource to complete the contract with its automotive client, and was discussing its funding needs with the customer. It is also trying to renegotiate contracts with its suppliers.

"The group will need to secure additional capital prior to the end of March 2024 to provide a more permanent solution to meet the company's short-term working capital requirements," Sondrel said.

Reporting by Frank Prenesti for Sharecast.com