(Reuters) - Auditors of Reliance Naval and Engineering Ltd have raised doubts about the Anil Ambani-led company’s ability to continue as going concern, with shares plummeting to a record low on Tuesday.
The assumption of going concern depends upon the approval of the company's bankruptcy-related resolution plan by secured lenders, their ability to generate cash flows and profit, the auditors Pathak H.D. & Associates said on Monday here.
The defence company, primarily engaged in shipbuilding, cited global downtrend in the industry and delay in defence contracts, which resulted in “temporary financial constraints”. This stoked an erosion of net worth and calling back of loans by secured lenders, leading to an approach for a resolution plan.
The company on Monday posted a loss of 4.09 billion rupees ($61.68 million) for the quarter ended March, its eighth straight quarterly loss.
Reliance Naval and Engineering shares were down 5.2 percent, as of 0553 GMT, after shedding as much as 9.1 percent earlier in the session. ($1 = 66.3150 Indian rupees)
Reporting By Arnab Paul in Bengaluru, Editing by Sherry Jacob-Phillips