Pacific Radiance

[weijian]

Pacific Radiance to make a provision of doubtful receivables of approximately USD 10.1 million in respect of services to Swiber’s Related Entities

Pacific Radiance Ltd. refers to the announcement released by Swiber Holdings Limited on 28 July 2016 in relation to its application for winding up and to place itself in provisional liquidation and wishes to inform that as a number of Swiber’s related entities ("Swiber's Related Entities") are debtors of the Company's subsidiaries, the Company is expected to make a provision of doubtful receivables of approximately USD 10.1 million in respect of services to Swiber's Related Entities (the "Provision of Doubtful Receivables").

The Company also wishes to inform that it had previously served several letters of demand to Swiber's Related Entities for recovery of the doubtful receivables, and will continue to pursue all legal avenues of recovery.

The Provision of Doubtful Receivables is expected to negatively impact the net tangible assets and earnings per share of the Company for the financial year ending 31 December 2016.

I think the highlighted in bold in Pacific Radiance's PR is misleading. While it doesn't affect the cashflow for the current period, cash is practically lost if the doubtful receivables is not recovered.

The Board of Directors of Pacific Radiance Ltd. (the "Company") refers to the announcements released on 29 July 2016 and 1 August 2016 relating to the provision (the “Provision”) of doubtful receivables (the “Doubtful Receivables”) for services rendered to the related entities of Swiber Holdings Limited (“Swiber”), and the various media reports following the situation faced by Swiber over the past two weeks. The Company wishes to clarify that whilst the Provision is expected to negatively impact the net tangible assets and earnings per share of the Company for the financial year ending 31 December 2016, it is a non-cash accounting provision which is not expected to significantly affect the Company’s cash flow position. Notwithstanding the aforementioned, the Company will continue to pursue all legal avenues of recovery of the Doubtful Receivables. 

http://infopub.sgx.com/FileOpen/2016-08-...eID=416435

[Big Toe]

What they are really saying is, "That bugger who owes us money has gone belly up. We will try to get the money back, but in the meantime, we will factor this into our balance sheet. BUT this will not affect us much as the money we have in our bank is still with us."

In the real world, any significant customer that goes bust and still owes the company is a big blow to the company's finances. Especially so in bad economic climate and a low margin business.
Ie. Many companies spend $900 to earn that $50-$100 from a customer. Assuming the company has only 3-5 of these customers(ok, so it is a very small company), one going burst will completely ruin the company.

[specuvestor]

Pacific Radiance to make a provision of doubtful receivables of approximately USD 10.1 million in respect of services to Swiber’s Related Entities

Pacific Radiance Ltd. refers to the announcement released by Swiber Holdings Limited on 28 July 2016 in relation to its application for winding up and to place itself in provisional liquidation and wishes to inform that as a number of Swiber’s related entities ("Swiber's Related Entities") are debtors of the Company's subsidiaries, the Company is expected to make a provision of doubtful receivables of approximately USD 10.1 million in respect of services to Swiber's Related Entities (the "Provision of Doubtful Receivables").

The Company also wishes to inform that it had previously served several letters of demand to Swiber's Related Entities for recovery of the doubtful receivables, and will continue to pursue all legal avenues of recovery.

The Provision of Doubtful Receivables is expected to negatively impact the net tangible assets and earnings per share of the Company for the financial year ending 31 December 2016.

I think the highlighted in bold in Pacific Radiance's PR is misleading. While it doesn't affect the cashflow for the current period, cash is practically lost if the doubtful receivables is not recovered.

The Board of Directors of Pacific Radiance Ltd. (the "Company") refers to the announcements released on 29 July 2016 and 1 August 2016 relating to the provision (the “Provision”) of doubtful receivables (the “Doubtful Receivables”) for services rendered to the related entities of Swiber Holdings Limited (“Swiber”), and the various media reports following the situation faced by Swiber over the past two weeks. The Company wishes to clarify that whilst the Provision is expected to negatively impact the net tangible assets and earnings per share of the Company for the financial year ending 31 December 2016, it is a non-cash accounting provision which is not expected to significantly affect the Company’s cash flow position. Notwithstanding the aforementioned, the Company will continue to pursue all legal avenues of recovery of the Doubtful Receivables. 

http://infopub.sgx.com/FileOpen/2016-08-...eID=416435

Agree. How can impairment of A/R not affect cashflow. I can imagine if one buys a machine and impaired it doesn't affect cash flow

Sometimes I think they just copy and paste announcements

What Big Toe mentioned is especially apt for leverage companies

[cfa]

The company was talking big , trying to imply that the amount was just a drop in the ocean to them ! Even big MNCs also care every cent !

[cyclone]

Amid gloomy conditions in Oil & Gas industry, the news is surely a good one.

Pacific Radiance refinances term loans and renews revolving credit facilities with key lenders totalling approximately US$185m

Highlights:
* This support from bankers is estimated to reduce the Group's term loan principal repayment by approximately US$103m through to 2019
* Interest rates of newly refinanced loans remain largely status quo
* Term loan repayment profile extended to 12 years from 7 years previously

More details in http://infopub.sgx.com/FileOpen/2016-10-...eID=426158

[Big Toe]

US banks took a huge hit during the sub prime saga, falling >80-90%
Now it is happening to the smaller Marine/O&G players locally.

Citigroup fell to $1 from a high of $50+
It took 7 years for it to recover to current levels about $5. (There was a 10 to 1 consolidation)
So it took 7 years to recover 10% of its previous high.

The point I am trying to make it this. If a company's share price has fallen drastically, it would be wishful thinking that business and share price would recover to close to what it was within a short span of a few years. But in extreme cases of pessimism and if the company survives and somewhat recover, there is a lot of money to be made for the gutsy few who took a chance at the company's darkest hours.

[specuvestor]

But % return is assymetrical

So if one bought at say $1 or even $2 the return over 7 years would be 400%-150%. It doesn't need to go back to what it was. That's why there are people who will take their chances with a falling knife. Difference for value investor is that we know the business and has a better guesstimate of whether the company will survive, even with a success probability of only 60% with outsized returns.

[brattzz]

strong backings from banks I think...

[cyclone]

Pacific Radiance Ltd. wishes to announce that on 2 December 2016, Mr. Mok Weng Vai, an executive director of the Company, was arrested by the Corrupt Practices Investigation Bureau ("CPIB"), on suspicion of an offence under Section 6© of the Prevention of Corruption Act (Cap. 241) of Singapore. Mr. Mok Weng Vai has not been charged in Court, and was released on police bail on the same day.

The Board is however unable to provide further details at this time as the Board understands that the CPIB’s investigation is ongoing.

The Board will make timely announcements as necessary to keep shareholders informed of any material developments relating to the investigations as they arise.

Pursuant to section 6© of the Prevention of Corruption Act (Cap. 241) of Singapore, if "any person knowingly gives to an agent, or if an agent knowingly uses with intent to deceive his principal, any receipt, account or other document in respect of which the principal is interested, and which contains any statement which is false or erroneous or defective in any material particular, and which to his knowledge is intended to mislead the principal, he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 5 years or to both."

[weijian]

Timely help by Ah Gong who will guarantee 70% of the loan. Lifeline has been extended and if OPEC eventually gets their way, Pacific Radiance might just survive this.

Pacific Radiance granted S$85 million in loans under government-backed financing schemes

Pacific Radiance Ltd. (Pacific Radiance or the Group), a provider of integrated offshore marine support services, has been granted S$85 million in loans under two Singapore government-backed financing schemes that will help support its working capital needs over the medium term. The two programmes – the Internationalisation Finance Scheme (IFS) by International Enterprise (IE) Singapore and the Bridging Loan (BL) scheme by Spring Singapore – aim to help local offshore and marine (O&M) companies gain access to working capital and financing so they can weather the current prolonged industry downturn.

http://infopub.sgx.com/FileOpen/170607_P...eID=457084