SHANGHAI, (Reuters) – China’s Qinghai Salt Lake Potash Co Ltd, the country’s largest producer of potash, has forecast its third consecutive annual loss, an outcome that could result in the company’s delisting from the Shenzhen Stock Exchange.
In a stock exchange filing on Saturday, the state-owned firm forecast an operating loss for the fiscal year ended Dec. 31, 2019, but clarified that its financial data related to its performance forecast was still not audited.
Investors in the company include oil-and-chemical conglomerate Sinochem Group.
Qinghai Salt Lake said it expects to post a net loss of between 43.2 billion yuan and 47.2 billion yuan ($6.26-6.84 billion) in 2019, compared with 3.45 billion yuan in the prior year.
“The main reason for the company’s loss is due to the bankruptcy reorganization process, (which) incurred estimated losses from asset disposals,” said Qinghai Salt Lake in its statement, adding that the initial impact on profits stands at about 41.74 billion yuan.
The producer of potash, which is a potassium-rich salt that is mined from underground deposits and is mostly used as fertilizer in agriculture industries, had previously said in stock exchange listings that it would be delisted if it reports a third successive annual net loss.
The debt-laden company had filed for bankruptcy with the Qinghai province court in September and halted trading in its shares in November.
The Qinghai province-based company had failed to sell off its assets in multiple rounds of auctions on China’s Taobao e-commerce site in a bid to raise funds.
In its fifth auction round at the start of the year, its auctioned assets, which included equity, shares and fixed assets, drew an opening price less than a fifth of its value, according to the auction listings.
Qinghai Salt Lake added in its statement that after its sixth round of auction, which saw no participants, the company will sell its assets to Qinghai Huixin Asset Management Co., Ltd. for 3 billion yuan.
(US$1 = 6.9008 Chinese yuan)