SINGAPORE (Aug 10): Pacific Radiance has issued a clarification regarding the provision of S$10.1 million for doubtful receivables for services rendered to the related entities of Swiber Holdings.

Pacific Radiance says although it expects the provision to negatively impact the net tangible assets and earnings per share of the company for the financial year ending Dec, it is a non-cash accounting provision and is not expected to significantly affect the company’s cash flow position.

The group also clarified that it operates on a different business model and is in a different business segment from Swiber.

“The group owns and operates a fleet of offshore support vessels which are mostly chartered out on a time charter basis, while Swiber is a contractor which offers a range of Engineering, Procurement, Installation and Construction services; the businesses are different.”

“Notwithstanding the aforementioned, the company will continue to pursue all legal avenues of recovery of the doubtful receivables,” says Pacific Radiance in a filing.

Pacific Radiance says it continues to have the full support of their banks, lenders, and business partners, and their cash flows remain manageable.

Since the onset of the industry downturn in late 2014, the group says it has implemented various measures as part of its risk mitigation strategy to proactively reduce both capital and operating expenses and manage its cash flow.

Key steps included the refinancing of loans with its key lenders and the amendment of a financial covenant of its sole S$100 million bond issue due Aug 2018 to avoid any technical breaches.

Pacific Radiance adds that it will continues to intensify its marketing and business development efforts to grow existing markets and expand into new ones.

The counter closed 18.3% lower at 11 Singaporean cents today.