JES International, Chinese shipbuilder, responded to SGX query on the unaudited financial results for the third quarter saying that its cashflow is sufficient to meet short term lending repayments.
SGX Query addressed to JES said “ The Company has Cash and Cash Equivalents of approximately RMB 554.6 million as at 30 September 2011. The Company also has negative net cash flows from operating activities. Short term bank borrowings as at 30 September 2011 is RMB 985.2 million. Please advise if the Company is able to meet its obligations to repay its short-term loan obligations as and when they fall due, and the basis for the view .”
JES International said in the statement “ The negative cash flows from operating activities arose mainly as a result of the Company’s expansion of shipbuilding activities that require higher working capital. The Company’s total short-term borrowings of RMB 985.2 million as at 30 September 2011 consist of short-term bank loans with different maturity dates. Given past records and the credit limit granted by the banks, the Company is usually able to secure at least the same amount of borrowing after the repayment is made .”
“ Between 1 October 2011 and 18 November 2011, the Company has repaid approximately RMB96.5 million of short-term borrowings that were due to the respective banks, and during the same period, the Company secured approximately RMB 155.0 of new short-term borrowings ” Company added.
Barring any unforeseen circumstances, the Company does not foresee any short-term cash flow issue and will be able to meet its obligations to repay its short-term borrowings as and when they fall due.
[mappress]
Shipbuilding Tribune Staff, November 24, 2011; Image: jesinternational