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BDO flags going concern uncertainty for China Kangda
AUDITORS BDO LLP has emphasised the existence of a material uncertainty for food-processing group China Kangda Food Company to continue as a going concern.
BDO noted the firm's liabilities exceed its assets by 282 million yuan (S$59 million) as at Dec 31, 2015. China Kangda also made a net loss of 28 million yuan in 2015.
China Kangda, in financial statements released at end-February, had also noted how bank borrowings of 649 million yuan were due in 2016.
However, the company said its directors think the group has sufficient working capital to finance its operations in 2016.
This is because the company continues to expand its production volume and cut costs.
It is actively negotiating with banks to renew its borrowings, having successfully renewed 50 million yuan and obtained written confirmation to renew up to 389 million yuan for another year.
China Kangda is also actively exploring alternative financing sources.
Qingdao Kangda Foreign Trade Group, which is substantially beneficially owned by a substantial shareholder of the company, has agreed to provide continuing financial support to enable day-to-day operations to continue, China Kangda said.
The counter last traded at S$0.081.