Auditor Questions SMT Holdings' Future
HONG KONG -- An independent auditor this week cast doubt on Surface Mount Technology Holdings' future, saying its plan to restructure carries so many unknowns, an opinion as to the EMS firm's survival could not be formed.
In a statement, Deloitte and Touch said SMT Holdings' financial situation and the extent of its restructuring were significant enough to prevent its blessing. "Because of the matters described [by SMT Holdings], we were not able to form an audit opinion on these financial statements," the auditor wrote in a Sept. 5 report.
SMT Holdings has suffered large losses over the past two years and took a nearly $100 million loss for the fiscal year ended March 31 on less than $300 million in revenue. The firm also has $23 million in bank borrowings payable on demand.
As part of its restructuring plan, SMT Holdings has agreed with 10 of its 11 bank lenders to hold off on calling for repayment, its downsizing its operations and seeking investment from an undisclosed outside company.
Despite these steps, Deloitte wrote, "it is presently not possible to determine the eventual outcome of the negotiation with the banks and the potential investor and the measures taken to restore the profitability and financial position of the Group. [T]he existence of material uncertainties cast significant doubt on the company’s ability to continue as [a] going concern."
