|Emitents||Rīgas kuģu būvētava, AS (48510000DWP0BMQCTM64)|
|Veids||2.2. Iekšējā informācija|
As it was notified already before, on August 16th, 2019 Riga City Vidzeme Urban Court resolved (a) to satisfy the application of legal protection proceedings of AS „Rīgas kuģu būvētava” (Company); (b) to implement the legal protection proceedings (Proceedings) of the Company; (c) to approve the plan of measures of the legal protection proceedings (Plan) of the Company; and (d) to set the period of 2 (two) years for implementation of the legal protection proceedings of the Company, effective from August 16th, 2019.
According to provisions established in the Plan to fulfil its commitments and ensure the implementation of the plan of measures of the legal protection proceedings the Company in August 2019 sold its floating dock 170 for a total amount of EUR 9.3 million, where the buyer was the company OÜ “Tallinna Laevatehas”, registered in Estonia.
Since the announcement of the implementation of the Company Proceedings until today the implementation of the Plan has been successful. During this period, in compliance with the provisions of the Plan the Company has been carrying out its core operations by resuming the provision of the ship repair services to its customers and continuing the lease of its movable properties/ real estate, as well as by performing the measures related to the annual survey of the berths and floating docks, repairs of berths and floating docks, the tidying works of its leased territory and improvement of the infrastructure owned by it.
The Company management has implemented major measures for attaining its goals, in particular, attraction of new customers, efficient use of the labour and material resources, improvement of work efficiency.
The Company has also performed enhanced analysis of the services it provides and its costs, and in order to secure improvement of the efficiency of the Company operations, the Company has evaluated the risk inherent to its business operations and has implemented major reorganizations, thus creating preconditions for improving the profitability of its operations in order to perform successfully on the current market and to compete with other market players.
The Company is implementing the needed measures in order to be able to offer high quality professional services to its customers by performing them at the same price as its competitors or a lower price.
The Company would like to point out that as of the moment of announcement of the implementation of the Proceedings it has successfully covered creditors’ claims for the total amount of 6,396,165.20 EUR which equals to close to 50% (fifty per cent) of the total amount of creditors' claims to be covered within the framework of the Proceedings, it has fully covered the employees' claims having arisen until the moment of announcing the Proceedings, and it performs regular payment to service providers and suppliers, performs current tax payments and it is paying wages to the Company employees.
Taking into account that ship repair services are still one the core operations of the Company, in order to gain income from the Company’s business operations for paying current expenses and covering liabilities within the Proceedings, in the beginning of this year the Company management met representatives of several ship owners companies and, in the result, during 2020 the Company has performed repair of 4 (four) ships and agreed on repairs of several ships during March, April and May 2020.
Unfortunately, due to causes independent of the Company, its business operations have been directly, substantially and unfavourably affected by the rapid global spread of Covid–19 disease caused by the corona virus reaching the scope of a pandemic.
Referring to the statement of the World Health Organisation presented on March 11th 2020 that Covid–19 has reached the scope of a pandemic, the government of the Republic of Latvia has declared the emergency situation in the whole territory of the country by its Ordinance No.103 of March 12th 2020 On Announcement of the Emergency Situation, in compliance with Article 4.1.1 (e) of the Law on Civil Defence and Management of Catastrophes, Article 4, Article 5.1 and Article 6.1.1 and 6.2, Article 7.1 and Article 8 of the Law On Emergency Situation and Exceptional State, Article 3.2 of the Law on Epidemiology Safety, in order to provide epidemiology safety and other measures aimed at restricting the spread of Covid–19 during the emergency situation from March 12th 2020 until May 12th 2020. Moreover, the Minister of Health of the Republic of Latvia has publicly announced that the further extension of the emergency situation is under consideration.
The Company would like to point out that for the purpose of restricting the spread of , Covid–19 cases, many precaution and safety measures were imposed, and taking in account that the customers of the Company are mainly foreign ship owner company and during the performance of repairs the presence of representatives of ship owner companies, including superintendents and service personnel providing supervision of the repair process, at the territory of the Company in the aquatorium of Riga port on ships is mandatory, due to the decision of the government of the Republic of Latvia to cancel international passenger traffic via airports, ports, by buses and by railway, and to prohibit persons and vehicles to travel via the airport, port, by crossing railway and road border crossing points both on the internal borders and across the European Union’s external borders, the representatives of the ship owner companies have not been able to come to Latvia to perform their duties.
Also the delivery of materials and spares needed for performing the repairs and involvement of foreign experts would be difficult.
Moreover, similar precaution and safety measures were imposed also in other countries, which also affected the arrival of ships and representatives of ship owner companies to Latvia, resulting in receiving of refusals of performance of ordered ship repair works from ship owner companies by the Company, resulting in the Company not receiving the envisaged revenue, causing substantial impact upon the financial results of the Company.
Thus, in the result of the above, the current situation has considerably affected not only the further business operations of the Company, including its revenues and the scheduled cash flow, but also the implementation of the Plan and due to this the Company has prepared the amendments of the Plan by providing the extension of the implementation term of the Proceedings by 2 (two) years or 24 (twenty four) months, totally providing for the term of implementation of the Proceedings of 4 (four) years or 48 (forty eight) months.
Upon modifying the forecast of the gaining of income of the Company, the expense forecast of the Company changes accordingly, thus the Company amends the Plan by providing relevant amendments in the planned revenue and expenses of the Company, as well as providing amendments in the schedule of satisfying the creditors’ claims:
In compliance with the provisions of the Insolvency Law on April 22nd, 2020 the Company has sent the amendments to the plan of measures of the legal protection proceedings developed by it to Company’s creditors for the provision of written consent.
The Company is thankful to its creditors for the understanding and support during the implementation of the plan of measures of the legal protection proceedings.
More detailed information on the amendments to the plan of measures of the legal protection proceedings of the Company will be provided before the amendments are submitted to the court for approval.
The Company informs that due to the consequences of Covid–19 the everyday operation of the Company is organized as much as possible in a remote regime, which significantly limits the preparation of the financial report for 2019, as well as because the Company’s auditor for auditing of the financial report for 2019 was approved only on December 23rd, 2019, the contract for auditing was concluded on January 14th, 2020, and the auditors could commence an auditing of the financial report only in February 2020, the Company will not be able to prepare the financial report for 2019, receive the auditor’s report and publish the audited annual report within the terms specified in the Financial Instrument Market Law.
Therefore the Company expecting to publish the audited financial report for 2019 till May 29th, 2020.
The Board of Directors of AS „Rīgas kuģu būvētava”