Profit warnings or in the case of Taiwanese polysilicon manufacturer Mascotte loss warnings, are rarely welcome news but the latest gloomy prediction from the company will at least not have come out of the blue for shareholders.
With the company in the midst of its latest shares issue and trying to convince shareholders to swallow an even bigger dilution in their holding to renegotiate a looming bond crunch, Mascotte warned the market today it expects to report a loss for the six months ended September 30.
The full extent of the loss is expected to be revealed at a board meeting on Friday November 29.
According to a company announcement on Tuesday relating to the bond renegotiation, Mascotte posted a full year loss of HK$3 billion (US$387 million) for the year ended March 31 and has net liabilities of HK$236 million of which HK$220 million are net current liabilities against a bank balance of just HK$53 million.
It is against that backdrop that Mascotte is attempting to persuade shareholders to back an agreement reached with the holders of HK$885 million of bonds which are set to mature on January 4. An agreement on that has to be reached by February 11.
The company also launched a shares issue on November 8 to try and raise HK$99.7 million to service its debts.