The independent auditors of listed holding company Lyons Financial Solutions Holdings have changed their negative view on the viability of the company, which now looks much happier than it did when posting results last year.

Deloitte & Touche said initially that the company's net loss of R45m for the year to May 2003 and liabilities exceeding assets by R13m cast doubt on its ability to continue as a going concern.

When the results were issued, management said that the year under review reflected a "turbulent period" in its history. It had closed down its structured finance division and downsized its operations, resulting in fewer deals being consummated. Its rationalisation programme also increased staff costs due to retrenchment packages.

However, the auditors have revised their opinion since Lyons, which has a 45% equity stake in R400m property fund Lyons Corporate Lease Fund, was taken over by Icarus Investment Corporation with effect from October 31.

Lyons chief operating officer Des Magua said the auditors were now "satisfied that there are no issues surrounding the going concern matter with Lyons".

The auditors based their revised opinion on the company directors' report, which said the group was in continuing negotiations with both its major bankers with a view to "rearranging its total banking facilities and restructuring them in an optimal way". The directors' report said this process should be completed by the end of next month.

"Management are confident that this together with the consolidation of Lyons Corporate Lease Fund will eliminate any questions surrounding the going concern issue," it said.

The report also said that Icarus Nominees, trading as Icarus Investment Corporation, had undertaken to inject fresh shareholder capital should the company require it.

Garry Fromentin, who was ousted as CEO towards the end of last year, is the man behind Icarus Investment Corporation and made the takeover bid.

Business Day