Singapore-based Triyards Holdings Limited said it was reassessing its ability to continue or to complete current projects with the existing financial resources available as it is experiencing liquidity shortage.
The financially-troubled shipbuilder is “experiencing difficulties in gaining access to new sources of liquidity in the current environment”. The company claims that the market has further worsened since the announcement of its business results for the third quarter ended May 31, 2017, released on July 21, 2017.
“The group is currently engaging all relevant stakeholders with an aim to ensure that the group will be able to deliver its existing projects to its customers,” Triyards said.
As informed, Triyards is in talks with owners on establishing new delivery timelines. There have been no cancellations of shipbuilding contracts so far, despite some of them being within the respective cancellation periods as the shipbuilder was unable to deliver the vessels within the respective contractual delivery dates including the grace period granted.
Furthermore, Triyards is working on a potential loan deal with respective lenders in order to secure funding for the projects at stake.
Coupled with the above, the group has experienced delays in delivery and collections from its clients for certain completed projects due to the fact that shipowners are severely affected by the downturn in the oil & gas industry, putting further pressure on the company’s ability to meet its loan repayments.
“Currently, the group has received demand letters from two of its lenders, for an aggregate overdue loan instalments amounting to approximately USD 0.8 million. The group is currently in negotiations with these lenders, the failure of which could potentially result in these lenders calling for the entire outstanding loan amounting to an aggregate sum of approximately USD 6.9 million and potential cross default on other loans granted by other financial institutions to the group,” the shipbuilder further stressed.
To that end, Triyards said it has engaged a financial advisor with an aim to put up a restructuring plan to its various stakeholders.
“In light of the foregoing, the group is not in a position to assess reasonably its financial position and could have a potential going concern issue until a viable restructuring plan is in place. Therefore, the company will be converting the trading halt of the company’s shares to a trading suspension,” the company concluded.