An independent auditor issued a disclaimer of opinion on E-Star’s interim report for the first eleven months of 2012. The auditor could not complete the audit work due to various reasons and therefore it could not issue an opinion. According to the auditor, there is a substantial doubt about EStar’s ability to continue as a going concern and also there are significant uncertainties about the evaluation and realization of investments and receivables. The third reason was E-Star’s liquidity situation and related uncertainties of debt/ bond repayments.
Our view:
Although the news is negative, it should not be a surprise for investors. However, we believe that it won’t be easy for E-Star to reach the bankruptcy agreement with debtors given the situation when nobody can evaluate how E-Star could continue as a going concern.