EGM looms as Mercantile Shipping hits rough seas

Wednesday, 27 November 2013 00:40 - - {{hitsCtrl.values.hits}}

An Extraordinary General Meeting is to be called by Mercantile Shipping Company Plc as losses mount. The company said as per forecasts made its losses would reach 50% of the stated capital by end of January 2014. The retained loss estimated is Rs. 27.5 million by January 2014 and Rs. 12.4 million in December 2013 from a positive Rs. 2 million as of November. In September retained earnings were Rs. 30 million. Mercantile Shipping’s stated capital is Rs. 37.2 million. The EGM to be convened is as per the Companies Act and shareholders will be updated with the status of the company, the nature and extent of the losses incurred, causes of the losses incurred and steps taken to prevent further losses and recoup losses incurred. Loss in the first six months of FY14 amounted to Rs. 82.5 million, up from a loss of Rs. 89 million a year earlier. Revenue though up 12% to Rs. 288 million, cost of sales up 8% to Rs. 294 million led to a gross loss of Rs. 6.3 million. An 11% increase in finance cost to Rs. 61 million had made a major impact. German firm Reederei Eugen Friedrich Gmph is the biggest shareholder with 40.6% whilst Hemas Holdings Plc holds 17% and Mercantile Marine Management and Jacey Trust Services own 10% each. Ceylon Shipping Corporation holds an 8% stake in the company.

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