Pre-settlement lender Ask Funding announced yesterday that following a strategic review brought on by poor operating results and a breach of its loan covenants it will put its business in run-off and remove the company from the official list of the Australian Securities Exchange. The company will issue an explanatory memorandum in April and call an extraordinary general meeting seeking shareholder approval for the plan. Ask Funding provides finance to people making personal injury and other legal claims, including matrimonial and inheritance settlements. Earlier this month, Ask Funding reported that it went into the red in the December half, after suffering a blow-out in loan impairments. It suffered a loss of A$27,310 for the six months to December, compared with a net profit of $319,762 for the previous corresponding period. The company also reported that it breached an obligation under its senior syndicated debt facility in December. The company breached its debt facility obligations when its interest cover fell below the required ratio of 2:1. Its financier, BankWest, said it would enter into a waiver in respect of the breach as long as the company reduced the facility limit from $57.1 million to $40 million. Ask Funding's auditor, KPMG, noted in the company's interim financial statement that further covenant breaches were possible. "There is material uncertainty with regards to the course of action the financier may take in relation to such breaches of the facility agreement. "This factor… indicates the existence of a material uncertainty which may cast significant doubt about the ability of the group to continue as a going concern." The company's performance in the December half was weak. Net interest income fell from $5.5 million to $4.7 million, period on period, and fee income was down from $1.1 million to $580,000. Loan impairments rose from $791,000 in December 2009 to $1.7 million in the latest half. The gross loan book contracted seven per cent to $56.4 million, from $60.8 million in the previous corresponding period.