Norwegian geophysical services company Electromagnetic Geoservices (EMGS) has continued to experience delays in payment and approval of invoices for an acquisition contract in the Americas. However, the company has now experienced progress with regards to payment of approved invoices.
In its 3Q 2019 report in November 2019, EMGS said it had been experiencing a delay in the payment of one of the company’s invoices under an on-going acquisition contract in the Americas. Furthermore, the company was experiencing delays in the approval process for several other invoices which were ready for final submittal to the customer.
EMGS said in November that, should the payment delays continue, it would have a material detrimental effect on the company’s liquidity and solidity, including the company’s ability to remain compliant with the free cash covenant.
In an update on Monday, December 24 EMGS said the delays in payment and approval of these invoices continued. However, the company is experiencing progress both with regards to payment of approved invoices and approval of invoices ready for final submittal to the customer.
As of Monday and after September 30, 2019, the company received cash payments of approximately $8.6 million under the contract, including cash advances received under a factoring facility related to the contract.
Based on current projections, and the information available to the company, EMGS expects to have a free cash position at December 31, 2019 in excess of $10 million. This projection assumes, amongst other things, no further cash payments from the end customer before December 31, 2019.
Offshore Energy Today Staff
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