CABLE TV: The auditors of Chorus Communications have warned of inherent uncertainty in its finances and say the company may have to call on its shareholders for funds. Chorus - the second-largest cable television company in the Republic - is a joint venture between Independent News & Media and Liberty Media of the US.
PricewaterhouseCoopers, the company's auditors, state in the company's most recently filed accounts that there can be no certainty that the loss-making company will meet the terms of its financing arrangements. The auditors note that: "since March 2001, the group has not achieved the performance criteria set out in its loan facility, which would allow further draw down of funds."
The company has been financed since March 2001 through the provision of long-term loans from its shareholders. A revised financing arrangement was put in place in January of this year, according to a note to the Chorus accounts for 2000, which were filed earlier this month.
PwC added a number of caveats, including that "the margin of facilities over requirements, which assumes a growing cash flow, is not significant". The auditors also point out that if the company does meet predetermined performance criteria, it will not be able to draw down further funds.
"In the event that the predetermined performance criteria for drawdowns of bank finance are not achieved during 2002, the new arrangement provides for an acceleration of the draw-down of the shareholders funding committed as part of the new financing arrangement. Inherently there can be no certainty in relation to any of these matters." PwC concluded that the directors of the company take the view that "the accounts of the company can be prepared on a going concern basis" because the operating targets can be set and the new financing arrangements are adequate.
The accounts show that the company lost €16.8 million in 2000 on a turnover of €54.8 million. These included interest of €11.1 million on its debts of €192 million. The company raised €82.9 million from its shareholders during the year to fund its capital expansion.
The company has not released its accounts for 2002, but some figures were published in the annual report and accounts of Independent News & Media, which were released earlier this month.They reveal that losses at the company rose to €36.6 million last year. A spokesman for the company said yesterday: "Chorus is operating to plan and is fully funded at this time."
