TALLINN - The auditor who examined the 2005 annual report of AS Rocca al Mare Suurhall said the company's ability to operate the large multipurpose arena on the western outskirts of Tallinn is under question due to financial troubles.
"As of Dec. 31, 2005, short-term liabilities of the company exceeded current assets by 17.6 million kroons (1.1 million euros)... The above circumstances refer to significant payment difficulties and call into question the sustainability of activity," says the conclusions by the auditor from Rimess MRI.
The auditor said whether the company can continue doing business depends on the owners coming up with additional financing.
As of the end of the year, the equity capital of Rocca al Mare Suurhall stood at 8.6 million kroons, less than half the size of the stock capital. Shareholders had decided during the reporting period to cut stock capital to 24.4 million kroons, but by the date the report was put together the court had not yet registered the reduction.
"Also, after the entry is made the equity capital of the parent company as of Dec. 31, 2005 will be less than half the size of the stock capital, failing to meet the requirements set out in the Commercial Code," the auditor said.
The management board of the parent company said in its commentary to the annual report that Rocca al Mare Suurhall is a unit that continues to do business. Operating income in 2005 amounted to 14.2 million kroons, and the company finished the year with a loss of 318,000 kroons, which is 94.3 percent less that the previous year's loss.
With OU Pivotal as majority owner with a stake of 67 percent, the other shareholders of Rocca al Mare Suurhall are the Estonian government (24.3 percent) and the city of Tallinn (8.6 percent).