SINGAPORE - Marine and offshore services provider EMS Energy said Wednesday (April 6) that its external auditors BDO LLP have cast doubts about the group's ability to continue as a going concern.
BDO highlighted the group's net loss of S$10.2 million for the financial year ended Dec 31, and that, as of that date, its current liabilities exceed its current assets by S$21.8 million.
"These conditions indicate the existence of material uncertainty that may cast doubt about the group's and the company's abilities to continue as going concerns", said the auditors.
Responding, EMS Energy said its directors believe the group is able to meet its obligations as and when they fall due based on several reasons:
Based on their forecast of the group's cash flows until March 31, 2017, they estimate that adequate liquidity exists to finance the group's working requirements for the next financial year.
The directors said management is negotiating to reschedule loan repayments with third parties amounting to S$10.47 million and will divest certain non-core assets for working capital if necessary.
The group has also refinanced some bank borrowings and management believes that bankers will continue to provide support to the group and allow for refinancing of bank loans as and when they fall due.
In addition, the group is also sourcing for additional funding from other banks.