Questions are being raised over the financial strength of Gasol plc, the lead partner in Electrogas Malta Ltd which has been entrusted by the government to build a new power station.
Data emerging from Gasol’s latest financial statements show that the company, recently delisted from the London Stock Exchange, could have problems raising cash for its ongoing projects.
The government recently authorised an unprecedented €88 million State guarantee to cover Electrogas’s exposure to a €101 million loan from Bank of Valletta.
According to the 2014 published annual report and financial statements of Gasol Plc, which holds 30 per cent in the Maltese project, the directors cast “significant doubt” on the company’s ability “to continue as a going concern.”
In its financial statement, Gasol plc reported a negative equity of €12.8 million and accumulated losses of €96 million by the end of March 2014.
Among the principal risks and uncertainties identified by Gasol chief operating officer Alan Boxton, “the company is likely to be required to obtain significant capital in the future” and that “there is no assurance that it (Gasol plc) will be able to raise such capital when it requires or that the terms associated with providing such capital will be satisfactory for the company”.
Scott Knight, the independent auditor from London’s public accounting firm BDO LLP, said in the report: “The group does not currently hold sufficient cash or liquid assets in order to meet its commitments as they fall due for the next 12 months.
“These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Group’s and the company’s ability to continue as a going concern.”
Questions sent to Gasol by The Sunday Times of Malta remained unanswered.
Meanwhile, Bank of Valletta declined to comment when asked what kind of due diligence had been conducted on Gasol before it approved a mega-loan facility of €101 million to Electrogas.
The Sunday Times of Malta last month revealed that at the end of 2014 the government had approved the €88 million State guarantee to cover a loan.
Following the story, Finance Minister Edward Scicluna admitted the “unprecedented” guarantee but said this was only temporary.
However, the government failed to respond when asked yesterday whether the ministry had looked into the financial situation at Gasol before issuing the guarantee.
The state guarantee issued by the government coincided with an announcement by Energy Minister Konrad Mizzi that delivery of the new power station at Delimara was 18-months behind schedule.
Meanwhile, sources in Brussels told this newspaper that the European Commission is still analysing whether the State guarantee and the security of supply agreement between Enemalta and Electrogas constitutes State aid.
Electrogas Malta Consortium
|30%||Gasol plc (lead partner)|
|30%||GEM Holdings Ltd|
|20%||Siemens Projects Ventures|