Norske Skogindustrier ASA said it’s seeking to replace its auditor because of “significant disagreements” over the valuation of its assets.
The distressed Norwegian paper maker said it will write down 482 million kroner ($56 million) of deferred tax assets in Norway and Australasia, but not fixed assets including paper mills. Norske Skog flagged disagreements with its auditor Ernst & Young over the valuation of assets and the industry outlook last month.
“Due to the significant disagreements that have arisen in the audit process for the financial year 2015, Norske Skog and the auditor have mutually agreed that a new auditor should be elected for Norske Skog at the annual general meeting in April 2016,” the Norwegian paper maker said in a statement on Wednesday. “Norske Skog is in the process of engaging a new auditor, and a proposal will be announced prior to the annual general meeting.”
Norske Skog needs to restructure about $1 billion of debt after its revenue plummeted along with readership of newspapers and magazines. Its proposed debt exchange has divided investors, with secured bondholders including BlueCrest Capital Management, Marathon Asset Management and Sampo Oyj lining up in opposition to the company’s largest shareholder, Blackstone Group LP’s GSO Capital Partners.
“Norske Skog believes that the financial statements for 2015 will be prepared on a going concern basis, based on the expected outcome of current discussions with certain stakeholders regarding the strengthening of its equity and liquidity position,” according to the statement. “After completing a diligent impairment testing at the year-end, we see no need for a write-down of the fixed asset values.”