LONDON (Alliance News) - IPSA Group PLC on Tuesday said its pretax loss widened for the year to end-March 2015, due to an impairment charge at its power plant in South Africa, as it looks to clear its remaining debts with creditors.
The power plant developer said its pretax loss was GBP6.9 million for the year to end-March 2015, swung from a pretax profit of GBP368,000 the year before, as IPSA booked a GBP5.1 million impairment charge over the year, most of which was booked at its power plant in Newcastle, run by Blazeway Engineering Ltd.
Blazeway was IPSA's UK holding company, which owned Newcastle Cogeneration Proprietary Ltd, IPSA's operating subsidiary in South Africa. IPSA sold Blazeway and, as such, Newcastle Cogeneration Propriety, in January, after a "chronic shortage of funds in late 2015 delayed installation [at the plant] and placed further pressure on the group's already cash tight position".
Revenue was slightly down for the year at GBP3.6 million from GBP3.7 million.
However, IPSA said the accounts have been prepared on a "going concern" basis resulting in an adverse opinion from auditors Grant Thornton UK LLP, which holds a differing view than that of the directors.
Grant Thornton said "the financial statements do not give a true and fair view of the state of the group or company's affairs as at March 31, 2015 and of the group's loss for the year then ended", adding that the statements have not been properly prepared in accordance with international financial reporting standards as adopted by the European Union.
IPSA said it plans to sell the balance of the plant pertaining to 701 turbines for a target price of GBP4.0 million, which will clear all remaining debt with creditors and leave IPSA as a quoted cash shell suitable as a partner for a potential reverse takeover candidate.
It said it "has no other sources of funding available to it at this time".
"Whilst there is no formal agreement with the group's principal creditor Ethos Energy or any other creditor for a moratorium on the amounts now due the board believes it will be able to realise sufficient proceeds from the sale of its assets and realisation of its debtors due to repay all of its creditors. However there can be no certainty that this will be the case and the risk remains that should this not be achievable in the time required that the company may need to apply for administration," IPSA said.
Shares in IPSA remain suspended. Shares in the company have been suspended since last September, and the company said they will remain so until it has published its interim results for the half year to end-September, which were due to be published by the end of 2015. It said it plans to publish these results as soon as possible.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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