$140 million impairment charge says it all

Impairment of Assets MMA Offshore Limited (MMA or Company) advises that it expects to book a non-cash impairment charge of approximately $140 million before tax against the carrying value of its assets as at 30 June 2016. The impairment charge reflects the ongoing impact on the Company’s operations of the low oil price environment which has led to a significant reduction in oil and gas related activity in both the Australian and International markets. The Company expects to recognise the impairment charge across the carrying value of the assets in each of its three operating divisions – Slipway, Supply Base and Vessels as follows:  $3 million against the carrying value of the Dampier Slipway;  $37 million against the carrying value of the Dampier Supply Base; and  $100 million against the carrying value of the Company’s vessel fleet. In determining the impairment amount, consideration has been given to the market value of the assets in each of the operating divisions as at 30 June 2016. The amount of the impairment charge is subject to finalisation of the Company’s full year audited financial statements. This non-cash impairment charge will not impact the Company’s compliance with its debt facility covenants.

Looks like could be no dividends and share price could be heading below 20 cents

oil continues to fall

not looking good for reversal of script