Investor Relations - RNS Announcements
Company : SubSea Resources PLC
TIDM : SUB
Headline : Interim Results
Released : 18:06 27-Dec-07
Number : 7160K
Thursday 27th December 2007
SubSea Resources PLC
('SubSea' or 'the Company')
Interim Results for the 6 months ended 30 September 2007 and Update on Funding and Approaches
SubSea Resources plc ('SubSea' or 'the Company' or 'the Group') today announces its Interim Results for 6 months ended 30 September 2007 and provides an Update on Funding and Approaches.
Key Features
This is the first set of financial statements that the Company is required to prepare in accordance with International Financial Reporting Standards ('IFRS'). The transition to IFRS is explained in Note 2 to these interim financial statements. All comparatives have been re-stated in accordance with IFRS.
Interim Loss before tax £3.7m (Interim 2006 re-stated: loss £ 6.5m).
As at 30 November 2007 cash was £2.9m and outstanding creditors (including the interest payment accrual for the Bond to 30 November 2007 of £0.75m including recoverable withholding tax) were approximately £1.5m, leaving free cash (excluding the bond liabilities of £ 5.0m repayable in 2011) of around £ 1.4m. An interest payment to the bondholder of £0.81m (including £0.16m recoverable withholding tax) is due on 31 December 2007.
The bonds liabilities are secured by a debenture and all monies chattels mortgage and a first preferred Panamanian ship mortgage on the 'John Lethbridge' in favour of the Bondholder. The Group has a covenant with its Bondholder to advise it if at any time it has less than £1,000,000 freely available cash. If such a situation should arise, the Company may not make or enter into any obligation whether by payment, contract or otherwise having a value in excess of £75,000 and /or make any decision that may have a material impact on its business without giving the Bondholder at least 2 Business Days notification of such proposed event.
The Company has bid for a five month survey, starting in May 2008, of seafloor massive sulphide deposits utilising the John Lethbridge and its associated equipment. The Company understands that this contract will be awarded early in 2008.
The Directors are of the opinion that the Group will require debt, equity or an alternative source of financing within the first few weeks of Calendar 2008. Subject to the terms of the contract, if the survey bid referred to above is successful, the Board believes it could make a positive impact to the Company's cash flows in the short term.
Emphasis of matter - going concern
The Company's Independent Auditors in their review of the Interim Results for the 6 months ended 30 September 2007 report:
"In forming our review conclusion, we have considered the adequacy of the disclosures made in Note 1 of the financial statements concerning the ability of the Group to continue as a going concern. In addition to the cash currently available, the Group will require additional financing to remain operational for the following 12 months. As set forth in Note 1 and the Chairman's statement, the Directors continue to pursue a number of potential opportunities, however should none of these opportunities prove viable and the group is liquidated, the sale of assets may well fail to generate sufficient funds to settle the secured creditors.
These conditions indicate the existence of a material uncertainty which may cast significant doubt on the ability of the Group to continue as a going concern. This financial statement does not include the adjustments that would result if the Group was unable to continue as a going concern."
On 2 October 2007 the Company announced that it had "received approaches regarding a possible change of control arising from a placing of new ordinary shares of the Company, or sale of the business of the Company. One of the approaches received by the Company also contemplated the possibility of an offer for the entire issued share capital of the Company."
Since 2 October 2007 the Board has been in discussions with a number of parties, including ones who approached the Company after the announcement made on that date. Discussions, including with the Company's Bondholder, have been extensive.
Indicative proposals currently being considered include the injection of equity into the Company by a new trade investor. Other proposals are for the sale of all or substantially all of the Company's assets and/or business, the proceeds from which would be used to repay the bond. The intention of this proposal would be to leave the Company with inter alia an AIM listing, cash and tax losses which could be a basis for a new business to be reversed into the Company.
The Board continues to work with a number of parties on approaches to providing finance and it remains possible that a transaction or transactions could be completed. However, the Board must alert shareholders that, even if such a completion occurred, it may well be that the sale of assets may well fail to generate sufficient funds to settle the bond in full or otherwise that the Company may have insufficient funds to continue trading. A further announcement will be made in due course as appropriate.
Ric Piper, Chairman, commented:
"It was Ross Perot who said: "Most people give up just when they're about to achieve success. They quit on the one yard line. They give up at the last minute of the game one foot from a winning touchdown.
Whilst the Challenges, as set out under Key Features and in the Interim Results announcement, for SubSea in the coming weeks are severe, the Board believes that there are Opportunities to be grasped for the benefit of shareholders and other stakeholders. Together with the Major Shareholders, the whole Board will continue to actively engage with all those who have proposals which would benefit SubSea.
We may be on the one yard line, but there is plenty to play for."
Enquiries:
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Chairman's Statement
The Chairman's Statement reviews the operational and financial performance for the 6 months ending 30 September 2007, together with an update on operational activities in Autumn 2007 as well as an update on Funding and Approaches.
Cautionary Statement
This half-yearly financial report has been prepared for the shareholders of the Company, as a whole, and its sole purpose and use is to assist shareholders to exercise their governance rights. In particular, this announcement has not been audited or otherwise independently verified. The Company and its directors and employees are not responsible for any other purpose or use or to any other person in relation to this announcement.
The report contains indications of likely future developments and other forward-looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These and other factors could adversely affect the Group's results, strategy and prospects. Forward-looking statements involve risks, uncertainties and assumptions. They relate to events and/or depend on circumstances in the future which could cause actual results and outcomes to differ. No obligation is assumed to update any forward-looking statements, whether as a result of new information, future events or otherwise.
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