Things have gotten worse for the troubled education and training group Vocation (VET) which yesterday suspended its shares from trading on the ASX and prepared to meet its bankers.
Vocation placed it shares in a trading halt on Monday, saying it was carrying out financial reviews.
It indicated it would be making a statement on the result of these reviews (which was taken to mean announcing another round of write downs and losses).
But yesterday Vocation requested its shares be suspended, saying it was finalising the reviews and may make changes to arrangements with its financiers.
Vocation said the board members will discuss the results of the reviews with Vocation’s financiers next Tuesday, January 27.
The company says it expects to update shareholders on its earnings guidance and financial arrangements the following day.
That means Vocation’s review has found more problems and the size of the losses will put the company in potential breach of its agreements with financiers.
Vocation only amended terms of its loan facility with its bank in December amid a review of the value of some of its assets.
Its shares had fallen sharply when it warned in early December that underlying earnings were expected to fall to between $25 million and $30 million for 2014-15 from $36.1 million last financial year.
The company has also flagged a first half underlying loss of $8 million when it reports next month – in light of yesterday’s announcement, that figure now looks low.
That situation is no longer the case and the losses are much greater.
Investors have already been warned not to expect an interim dividend.
