Celtic Resources wants to write off ?8.3m, court told

The Irish oil and mineral exploration company, Celtic Resources Holdings, told the High Court yesterday it wants to write off…

The Irish oil and mineral exploration company, Celtic Resources Holdings, told the High Court yesterday it wants to write off accumulated losses of some €8.3 million arising from unsuccessful explorations by its Irish and UK subsidiaries.

Ms Justice Carroll fixed January 26th next for the hearing of the company's petition seeking to write off its losses by way of a reduction in capital.

In an affidavit, Mr Michael Palmer, finance director of the holding company, said that while it had a deficit on its profit and loss account of about €8.3 million, it had a a positive net asset value of about €16.374 million.

Despite the company's solvency, the carried forward losses prevented it from considering the possibility of paying any dividend to shareholders in respect of profits that might be earned in future years.

READ MORE

The board of directors had decided steps should be taken to write off all or part of the losses against the company's share premium account, which stood at €17.543 million at the end of December 2000. The company had continued to be in a position to pay off all its debts in full.

Celtic Resources is the holding company for a group of companies engaged on a worldwide basis in oil and mineral exploration.

Although the company had a 20 per cent working interest in four offshore North Sea gas licences and a 20 per cent interest in one onshore exploration licence, the focus of its activities was now in the former Soviet Union, Mr Palmer said.

Its principal activities were stated to be mainly located in the Kazakhstan region with a 50 per cent interest in the Nezhdaninskoye gold project in the Sakha Republic; 100 per cent interest in the Suzak gold mine together with an 80 per cent interest in Abyz base metal project and a 60 per cent interest in the Leninogorsk tailings project.

About €4.452 million of its losses related to unsuccessful exploration interests held by the company through its various Irish and UK subsidiaries which have since been sold, abandoned or converted into passive interests.

The balance of the deficit of about €3,094 million is related to management costs on the unsuccessful exploration interests.