Based on my calculations, I expect the company to run out of cash by the end of the year
(As at 30 Sep 2018)
1) Cash amount: S\$5.4 million
2) Cash burn: ~S\$1.5 million per month
3) Estimated interest repayment= Total debt S\$38.16million * 3% interest / 12 months = ~S\$0.1 million per month
4) ST borrowing of S\$14.3 million repayable within 1 year = ~S\$1.2 million repayment per month

Total estimated cash outflow per month= (2) + (3) + (4)= ~S\$2.8 million per month

Cash runway from 30 sep 2018 = S\$5.4 million / S\$2.8 million= 1.9 months left (From 30 Sep 2018) before becoming insolvent

Can the company raise capital from rights issue? Probably. But I dont think this can be completed in time before the time runs out.

Can the company refinance its debt? Maybe, but i think banks may be unwilling to do so because of the following reasons:

Total debt amount = S\$38.16 million
Total possible collateralised PPE= S\$96.6 million
- ~S\$40 million is allocated to leashold property (Possible to collateralise against land)
- Remaining S\$46.6 million is from equipment, machinery and vessels (I dont think banks will accept the equipment, machinery and vessels as collateral as these are probably very illiquid, if yes the ltv will be below 20-30%)

Optimistic assumptions: Assume LTV of 70% for S\$40 million (leasehold property) and LTV of 30% for S\$46.6 million (equipment, machinery & vessels) possible refinance amount = S\$41.98 million.

This is close to its existing debt amount, so at best they can roll over their debt. But the cash burn of S\$1.5 million per month will continue unless company restructures further to reduce operating costs.

Also if you look at their balance sheet under ST assets, they have ~S\$11 million assets held for sale since 31 Dec 2017 until 30 Sep 2018, this value has not been converted to cash probably because the company is unable to find buyers for these assets (1 crane and some vessels)

Take a walk along West Coast Park waterfront area, you will be able to see the 2 floating platforms owned by company being idle and quite a number of vessels at the company waterfront yard just there without much repair activity. No/little work means little revenue to sustain the company.

cpa

Based on Q3 Cashflow statements, the net cash outflow is about \$1m for the Q3 (three months). This is not forgetting that they have \$0.7m of cash generated from operations for Q3.

You mentioned that the company is unable to find buyer for its assets. Pls refer to Management comments in the Q3 financial statement (ended 30 September 2018) which states the following:

During the quarter ended 30 September 2018, the Group acquired a 5000 DWT oil product tanker Angel Sun, measuring approximately 101.55 metres by 15.3 metres which is used for marine fuel trade. The vessel has been sold in the fourth quarter of the year for a profit.

WHLPLKPS