Friday, April 29, 2011

CEC Negative Net Assets $27.6 Million

Announcement just out this evening at 5.44pm ASX release is here!

The guts of the announcement, beyond the typical spiel on floods, cyclones, and pestilence et al for being unable to produce half-yearly accounts is as follows:

CEG considers it appropriate to inform the market that the accounts when released will include the following material events:
      - Impairment of all or much of the Deferred Tax Asset (‘DTA’). The DTA amounts to around $32 million.
      - Material losses on realisation of assets and trading of around $14.7 million after tax.
      - Impairment of intangible assets, goodwill, of around $9 million, to a value of zero.
      - Following the above impairments the accounts would show Negative Net Assets of around $27.6 million.
However we will have to wait for further details as "following consultation with the auditors unfortunately lodgement will not occur until on or before Wednesday 4th May 2011." 

The announcement also incudes "CEG advises that Roy Lavis is the new Company Secretary for the Group." There is no explanation of what may have happened to the old Company Secretary?

Note: Negative net assets does not necessarily mean insolvency. In Australia cash flow is the primary test and s95 of the Corporations Act defines solvency as A person is solvent if, and only if, the person is able to pay all the persons debts, as and when they become due and payable

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