Aegean believes it needs to write off approximately $200 million of accounts receivable. File Image / Pixabay
Aegean Marine Petroleum Network [NYSE:ANW] says it believes approximately $200 million of accounts receivable at December 31, 2017 will need to be written off following the discovery of suspect transactions related to four of its counterparties.
In an SEC filing today, the bunker supplier said it had reached the conclusion based on preliminary findings from its audit committee comprised of newly elected board members and independent legal counsel.
"These amounts are currently due from four counterparties and were reflected in the Company's financial statements as of December 31, 2017. There was approximately $172 million as of December 31, 2016 and $85 million as of December 31, 2015 due from these four counterparties," Aegean explained, without revealing the counterparties' identities.
Aegean says it will pursue all available legal recourse against individuals and entities involved in the suspect transactions
"The transactions that gave rise to the accounts receivable may have been, in full or in part, without economic substance and improperly accounted for in contravention of the Company's normal policies and procedures."
In connection with the discovery, Aegean says a number of its employees "across multiple functions" believed to have been involved in the transactions have either been terminated or placed on administrative leave pending the outcome of an investigation into the matter.
The preliminary findings have also been reported to the U.S. Securities and Exchange Commission and the Department of Justice, and Aegean says it will pursue all available legal recourse against individuals and entities involved in the suspect transactions.
The supplier adds that it cannot determine the full impact on its financial statements or how the adjustment will be recorded, but warned that as the review process continues it could lead to other adjustments resulting in further impact to its financial statements.
Aegean says it will provide further comment when the investigation is completed.
Having closed at $2.85, following today's news Aegean's share price dropped as low as $0.95 in after hours trading.