Auditors flag going concern issues with First Ship Lease Trust

MOORE Stephens, the auditors of the financial statements of First Ship Lease Trust, on Tuesday drew attention to the business trust's full-year net loss of US$31 million for the period ended Dec 31, 2016, as well as the group's current liabilities, which exceeded its current assets by US$179.4 million.

"These conditions indicate the existence of a material uncertainty which may cast significant doubt on the ability of the group and the trust to continue as going concerns and therefore that they may be unable to realise their assets and discharge their liabilities in the normal course of business," the auditors said.

However, the management of the trustee-manager believes that the company has the resources needed to continue to operate, given that the management has prepared a cash-flow projection and is of the view that the group will have sufficient cash resources to satisfy its working capital requirements, and to meet its obligations as and when they fall due.

The group will also continue to receive financial support from its lenders and the refinancing of the current bank loan will be successful, it added.