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Falcon Energy board says company can continue as a going concern after auditors cite 'material uncertainties'

FALCON Energy Group is able to continue as a going concern, the board told the bourse operator on Wednesday night, a day after company auditors flagged the existence of material uncertainties in their report on financial statements for the year to June 30.

Replying to queries from the Singapore Exchange (SGX), the board said that it had come to its opinion based on the company's ability to successfully negotiate with lenders and finalise the debt restructuring plan and resolve legal claims made by a secured lender over outstanding debts.

The board also believed in the group's ability to secure new charter contracts, with better margins and positive cash flow, and to generate enough cash flow from its operations over the next 12 months to meet its obligations under the debt restructuring plan, it said.

The company auditors had previously said that Falcon Energy is "exposed to an increased liquidity risk" that could hurt its ability to negotiate with lenders and finalise a debt restructuring plan.

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Meanwhile, Falcon Energy's directors confirmed, as requested by the SGX, that all material  disclosures have been given for orderly trading of the company's shares to continue.

Falcon Energy shed 0.7 Singapore cent, or 18.42 per cent, to 3.1 Singapore cents, before the announcement.