LONDON (Alliance News) - REACT Energy PLC Wednesday said its pretax loss widened in the first half of the year on the back of impairments, as the company continues to try to secure financing and implement the scheme of arrangement suggested by its examiners.
In May, REACT and its related companies had applied to the High Court in Dublin to seek the appointment of an examiner, with the aim of restructuring the business to create a "sustainable business model" under court protection.
REACT said it had decided to seek examinership after funding discussions with a strategic investor were suspended due to a dispute with the landlord of its Enfield site, difficulties in financing the re-powering of its Newry site, and legal actions taken against it by some creditors.
Earlier in June, the examiners formulated proposals for a scheme of arrangement, which needs approval from the High Court in Ireland, and was presented to the court on June 17. Shareholders and creditors have already voted in favour of the scheme of arrangement.
"After making enquiries and considering the matters referred to above, the directors believe that progress towards securing finance has been made. The directors have a reasonable expectation that the company will successfully exit the examinership process and the group will have adequate resources to continue in operational existence for the foreseeable future," it said Wednesday.
The company has already signed a conditional facility letter with a third party investor for up to GBP900,000 at a 15% fixed rate interest per year.
On Wednesday, REACT said its immediate objectives are to complete the new financing facility to secure funding for the "foreseeable future", whilst obtaining the necessary approvals for the scheme of arrangement.
REACT reported a EUR1.3 million pretax loss in the six months ended December 31, widening from a EUR846,438 loss a year earlier after it booked EUR506,390 in impairments that it did not book in the first half of the previous financial year. It also reported a EUR100,275 loss on foreign exchange, swinging from a EUR26,778 gain.
The largest single impairment taken totalled EUR432,000 and was booked against the Enfield project, with the balance being attributable to the Newry, Plymouth and Reforce Energy projects.
In a separate statement Wednesday, the company released its results for the year ended June 30, 2014. REACT booked a EUR15.2 million pretax loss compared to a EUR3.0 million loss the year earlier, widening on the back of further significant impairments totalling EUR12.8 million from only EUR318,750 a year earlier.
REACT shares are currently suspended due to the ongoing issues at the company.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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