Wollongong Coal has declared a $73 million loss after a year in which its total liabilities pushed closer to $1 billion.
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Lodging its “preliminary final report” with the stock exchange, the company said it was forced to make the declaration of the huge loss because Australian accounting standards required it to class large quantities of its debts as liabilities.
This, the miner said, was because of broken covenants to lenders – failures to make repayments by certain dates, which had caused the lender to declare a breach.
Income was down to $29 million from $36 million the previous year.
The result would have been worse were it not for the fact that Wollongong Coal was able to claim its assets were worth more than $829 million.
This included a valuation of $777 million for its “property, plant and equipment” at the Russell Vale mine, which is not operating, and the Wongawilli mine, which delivered about $27 million in sales over the year.
With total liabilities listed as more than $909 million, well in excess of assets, shareholders may question the company’s solvency.
The company’s directors still claim they consider the company to be a “going concern” – that is, solvent.
This claim is made on the basis of funding and support from the Jindal Group, the Indian steel and power company which owns Wollongong Coal.
Wollongong Coal gives its full-year results for the 12 months to March 31, as this is the financial custom in India.
The results are labelled preliminary as they have not yet been independently audited.
Wollongong Coal shares were unchanged at 0.5c, with no shares sold on Friday.