India's Reliance Naval and Engineering auditors raise going concern doubts

Swan Defence and Heavy Industries

24/04/2018 07:35

April 24 (Reuters) - Auditors of India's Reliance Naval and
Engineering Ltd  RELV.NS  have raised doubts about the Anil
Ambani-led company's ability to continue as going concern, with
shares plummeting to a record low on Tuesday.  
    The assumption of going concern depends upon the approval of
the company's bankruptcy-related resolution plan by secured
lenders, their ability to generate cash flows and profit, the
auditors Pathak H.D. & Associates said on Monday https://www.bseindia.com/xml-data/corpfiling/AttachLive/6a27404e-cc8e-4264-86c0-caf42d5f4a17.pdf.
 
    The defence company, primarily engaged in shipbuilding,
cited global downtrend in the industry and delay in defence
contracts, which resulted in "temporary financial constraints".
This stoked an erosion of net worth and calling back of loans by
secured lenders, leading to an approach for a resolution plan.
    The company on Monday posted a loss of 4.09 billion rupees
($61.68 million) for the quarter ended March, its eighth
straight quarterly loss.
    Reliance Naval and Engineering shares were down 5.2 percent,
as of 0553 GMT, after shedding as much as 9.1 percent earlier in
the session.
    
($1 = 66.3150 Indian rupees)

 (Reporting By Arnab Paul in Bengaluru, Editing by Sherry
Jacob-Phillips)
 ((arnab.paul@thomsonreuters.com; +91 8067491310; Reuters
Messaging: arnab.paul.thomsonreuters.com@reuters.net))