Auditor questions Atlantic Navigation’s ability to continue as going concern
The ability of Singapore’s offshore vessel owner Atlantic Navigation to continue as a going concern has been brought into question by an independent auditor.
In an independent auditor’s report on the audited financial statements of the company and its subsidiaries for the financial year ended December 31, 2016, the company’s auditor, Ernst & Young, has included an emphasis of matter in respect of material uncertainty related to the group’s ability to continue as a going concern.
Ernst & Young noted in the report that the group incurred a net loss of $11.4 million during the financial year ended December 31, 2017, and as at that date, the group’s current liabilities exceeded its current assets by $39.7 million.
According to the auditor, these factors indicate the existence of a material uncertainty which may cast significant doubt about the group’s ability to continue as a going concern. The auditor added that the group’s ability to continue as a going concern is dependent on its ability to secure funding to support its working capital requirements as well as committed capital expenditure in the near term and obtain support from various parties to restructure its loans and borrowings so as to enable it to meet its financial obligations.
Ernst & Young further said that, if the group is unable to continue in operational existence for the foreseeable future, the group may be unable to discharge its liabilities in the normal course of business and adjustments may have to be made to reflect the situation that assets may need to be realized other than in the normal course of business and at amounts which could differ significantly from the amounts at which they are currently recorded in the balance sheet.
However, in a Monday filing on Singapore Stock Exchange, Atlantic Navigation said that the opinion of the auditors remains unqualified.
The company said that, in the opinion of the directors, the group will be able to continue as a going concern as there are reasonable grounds to believe that the company will be able to pay its debts as and when they fall due as the group will be able to secure funding to support its working capital requirements as well as capital expenditure in the near term and obtain support from various parties to restructure its loans and borrowings so as to enable it to meet its financial obligations.
At the end of December, the company owned 19 vessels with a carrying value of $102.5 million for which it recorded an impairment loss of $2.27 million.