RNS Number : 7047U
20 October 2010
20 October 2010
("Cosalt" or the "Company")
Cosalt (www.cosalt.com), the specialist provider of critical safety equipment and services for the Offshore Oil & Gas and Marine industries, provides the following update on its internal review into operating practices in the Company's Aberdeen based Offshore division. While customer services have been maintained at the highest standard, an inventory check has revealed evidence of a Company owned stock and work in progress shortfall of up to £4m. The further detailed investigation required to establish the extent of the shortfall with accuracy is already underway. The Company has identified a series of doubtful transactions involving a supply company which evidence suggests account for a substantial proportion of this shortfall. The transactions could give rise to claims against those involved with the supplies in question and the Company has instructed KPMG as forensic accountants to complete the compilation of this evidence and Dundas & Wilson, Scottish solicitors, to advise upon recovery of any losses arising. To avoid prejudicing its legal remedies and any future action, the Company is unable to comment further on such claims at this stage, save to say that it will be taking all steps to maximise recovery.
The Board confirms that, notwithstanding the shortfall, the Company has sufficient stock to ensure there will be no interruption to services provided by the Offshore division. The Company's banks have been kept closely informed and the shortfall is not expected to have any further impact on the Company's net borrowings.
A further detailed update will be provided on completion of the review.
Cosalt plc (www.cosalt.com) Tel: +44 (0)1472 725100
Mark Lejman, Chief Executive
Mike Reynolds, Finance Director
Evolution Securities Tel: +44 (0)20 7071 4300
Cardew Group Tel: +44 (0)20 7930 0777
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