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The company has $4954M of liabilities against $1587M of Equity and have valued their vessels to be $5171M on the balance sheet. But in truth, if they are pressed to sell their vessels in the current economic climate, they wont be getting $5171M. My guess is that they will get around 60% of the $5171M value. Which means the company is in negative equity. So the current book value of US$7.77 is a bit deceiving.
Also the company has more CL than CA with cash comprising around 15% of its CA. Perhaps, they should write down the fair value of their vessels as they will be able to get tax benefits from S. Korea.
Also the company has more CL than CA with cash comprising around 15% of its CA. Perhaps, they should write down the fair value of their vessels as they will be able to get tax benefits from S. Korea.