Chinese Oilfield Technology Group in Dire Straits
The Board of Directors of China Oilfield Technology Services Group Limited & its subsidiaries, issues financial update & a warning.
The Group expects challenging market conditions to continue in the next financial year and the foreseeable future. To reduce its reliance on the PRC oilfields market, the Group will continue its efforts to develop the overseas market. However, the development of the Group’s overseas business will require time. Moreover, the slowdown in the global economy, the European debt crisis and the general uncertainties in the energy industry have contributed to the challenges faced by the Group.
Although the manufacturing cost of the submersible linear oil pumping units developed by the Group has decreased recently, it remains substantially higher than when the Group first embarked on the project. Hence, the product is still not commercially viable at this point.
In its efforts to turnaround the business and enhance shareholder value, the Group has been actively seeking various business opportunities, including the injection of new businesses, mergers, acquisitions and other forms of business consolidation.
Shareholders and potential investors should exercise caution when trading in the shares of the Company, and where in doubt as to the action they should take, they should consult their financial, tax or other professional adviser immediately.