ENM Energem

 

TIDMENM 
 
RNS Number : 8116V 
Energem Resources Inc. 
16 July 2009 
 

 
 
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|                          AIM: ENM      For immediate release                           | 
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ENERGEM RESOURCES UPDATES FINANCIAL STATEMENTS FILING STATUS AND SUSPENSION OF 
TRADING ON AIM 
 
 
VANCOUVER, July 16, 2009 - Further to temporary suspension of trading in the 
common shares of Energem Resources Inc. ("Energem" or "the Company") on AIM 
commencing 30 June 2009 for failure to lodge annual financial statements for the 
year ended 31 December 2008 by that date, Energem reports that it has not yet 
lodged or sent the required annual financial statements to shareholders. 
 
 
The reason for the delay in finalisation of the annual financial statements is 
that the Company has, to date, been unable to satisfy its auditors as to the 
recoverability in full of accounts receivable due to the Company at 31 December 
2008 by related party debtors amounting to US$54 million (the "Related Party 
Debt"). Pursuant to the previously disclosed long-standing related party 
arrangements with A1 Holdings Limited ("A1"), Lyndhurst Racing Limited 
("Racing") and Lyndhurst Limited ("Lyndhurst") (together, the "Related 
Parties"), the Company provided various services to the Related Parties 
throughout the period 30 June 2008 to 31 December 2008.  Lyndhurst is indirectly 
controlled by Antonio Teixeira, Deputy Executive Chairman of the Company, who 
also indirectly controls approximately 27.5% of the issued and outstanding 
common shares of Energem and is a director of A1 and holds a minority interest 
in A1 and Racing. The Related Party Debt represents approximately 35% of the 
total assets of the Company per its balance sheet as at 31 December 2008 and is 
material in relation to the financial statements and going concern status of the 
Company. 
 
 
The Related Party Debt arises from the same type of on-going transactions 
regularly conducted by the Company with the Related Parties over a number of 
years which primarily relate to logistics and procurement services as disclosed 
in the Company's AIM admission document as well as the Company's audited and 
interim financial statements and related published information. 
Historically, the value of transactions with these related parties, which were 
subsequently paid, have exceeded the value of the currently due and unpaid 
Related Party Debt  and, whilst the amounts have fluctuated historically, the 
Company has always previously been paid the amounts due, including a percentage 
profit fee, in relation to any such transactions. 
 
 
The Company has resolved that the most appropriate method of resolving the audit 
issue and to remove the credit risk going forward is to obtain receipt of the 
funds from the Related Parties. 
 
 
As the Related Parties are close to finalising and receiving third party finance 
in order to, amongst other things, provide for a swift repayment of the Related 
Party Debt, predicting a time period for recovery has been difficult but the 
Company is sufficiently informed by the Related Parties of the arrangements 
being put in place by them for settlement of the Related Party Debt to remain 
confident of recovery. Whilst it is clear to the Company that the Related 
Parties concerned are experiencing cash flow difficulties and have been unable 
to settle the debt in their usual timely manner, they have obtained approval 
from two European financial institutions' credit committees for credit 
facilities which will be used, in part, to settle amounts due to Energem. 
Closing conditions to the extension of the necessary credit are in the process 
of being resolved. 
 
 
The Company continues to expect such settlement by the end of July 2009. 
 
 
Cautionary Note Regarding Forward-Looking Information 
 
 
This news release contains forward-looking statements and information.  Such 
forward?looking statements and information include, but are not limited to, 
statements regarding Energem's ability to recover the Related Party Debt and the 
timing of completion of the audit on its financial statements for the 2008 
fiscal year.  The Company does not intend to, and does not assume any obligation 
to, update such forward-looking statements or information, other than as 
required by applicable law. 
 
 
Forward-looking statements or information involve known and unknown risks, 
uncertainties and other factors that may cause the actual results, level of 
activity, performance or achievements of Energem and its operations to be 
materially different from those expressed or implied by such statements.  Such 
factors include, among others, those that are not within the control of Energem, 
such as the ability of the Related Parties to secure required financing and to 
satisfy the funding conditions of their lenders, assumptions that such 
financing, once obtained, will be used by the Related Parties to repay amounts 
owing to Energem, and assumptions that the audit will be successfully concluded 
once the Related Party Debt is repaid.  Although the Company has attempted to 
identify important factors that could cause actual results to differ materially 
from those contained in forward-looking statements or information, there may be 
other factors that cause results to be materially different from those 
anticipated, described, estimated, assessed or intended.  There can be no 
assurance that any forward?looking statements or information will prove to be 
accurate as actual results and future events could differ materially from those 
anticipated in such statements or information.  Accordingly, readers should not 
place undue reliance on forward-looking statements or information. 
 
 
For further information, please contact: 
Energem - Rob Rainey in Johannesburg at telephone +27 11 372 3300; Fax +27 11 
454 1673 or email: info@energem.com; 
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| Refer to our website:        |                  | 
| www.energem.com              |                  | 
|                              |                  | 
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| Canaccord Adams Limited      |                  | 
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| Robert Finlay/Andrew Chubb   | +44 207 050 6500 | 
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|                              |                  | 
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| Smithfield                   |                  | 
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| Reg Hoare/Will Henderson     | +44 207 360 4900 | 
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This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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