Singapore-based Oceanus Group Ltd (歐聖集團), the world’s largest operator of abalone farms, said its new management team and new funding plan would help the company emerge from dire financial straits within one year.
Shares of the company’s Taiwan depository receipt (TDR) issuances closed at NT$2.11 yesterday — falling by the daily limit of 7 percent for the second consecutive trading day — with turnover down to only 1,000 shares.
The sharp decline was followed by a Taiwan Stock Exchange (TWSE) announcement that it would categorize the stock as a “full-cash delivery stock” on Wednesday, after an audit by a certified public accountant in Singapore of Oceanus’ financial results for last year was found to contain a disclaimer.
The move prompted the head of the company to come to Taiwan yesterday to explain its financial situation in a bid to stabilize investors’ confidence.
“I am confident the company can return to the right track in the second half of the year,” Oceanus chairman Ng Cher Yew (黃子耀) said in a press conference in Taipei.
Ng said unreasonably high operating costs and low-quality products were two major drags on the company’s finances last year, resulting in a cash-flow shortage.
However, the company replaced its management team at the end of last year to better control spending and develop new culture techniques to enhance the quality of its products, Ng said.
“Some improvement has been shown in the company’s financial results in the first quarter,” Ng said.
Oceanus posted 40 million Chinese yuan (US$6.3 million), or 0.02 yuan a share, in net losses for the first quarter, which was much smaller than the 720 million yuan, or 0.36 yuan a share, loss it recorded in the third quarter last year, company financial statistics showed.
In addition, Oceanus plans to raise S$20 million (US$15.7 million) to deal with cash flows. The fund has been set up by investors, and only awaits approval at an upcoming shareholders’ meeting, Ng said.
Ng said the company would continue to communicate with TWSE, adding that it hoped the bourse would remove the stock from the full-cash delivery category as soon as possible.
The company will hold its annual shareholders’ meeting in Taiwan on May 30.