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FTN Cocoa Nigeria Plc is staring bankruptcy in the face as the company recorded zero sales, carrying a load of debts that has weakened the balance-sheet.
The firm had sounded an ominous alarm bell that the non-availability of required working capital to procure cocoa beans hamstrung operations and efforts being made to secure working capital both locally and internationally were yet to yield desired results.
Taking the aforementioned challenges into consideration means it is not surprising FTN Cocoa recorded zero or nil sales to end 2023 financial year that compares to an abysmally poor top-line figures of N62.19 million as at December 2022.
A foreign exchange loss of N7.76 billion led to a loss after tax of N8.13 billion as at December 2023, and it appears owners don’t have any idea on how to salvage an entity at the brink of collapse.
One of the company’s foreign partners, Transmor Commodity USA, unfortunately, had financial problems and went into liquidation; this led to a virtual closure of operations.
The company is struggling to pay staff salaries, statutory payments, secretary and auditors’ fees with other financial obligations including listing fees are all outstanding.
It is not surprisingly disheartening that almost all the members of staff of the company have resigned their employment due to the company’s inability to pay their salaries.
Technical insolvency issues are looming as the balance sheet is deteriorating. Total assets of N13.30 billion as at December 2023, is lower than N18.26 billion, resulting in a negative shareholders’ fund of N4.95 billion.
A negative retained earnings of N17.06 billion means the company has been recording losses more than profit throughout its existence.
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