PricewaterhouseCoopers LLP, the auditor of Celestial Nutrifoods, says the financial statements of the company and group as at Dec 31 indicate the existence of material uncertainties which may cast significant doubts on the China-based food manufacturer’s ability to continue as going concerns.

PwC noted that as at Dec 31 2009, Celestial Nutrifoods’ current liabilities exceeded its current assets by RMB448 million ($91.7 million), mainly due to the redemption payment obligations in relation to the $235 million zero-coupon convertible bonds with carrying amount of RMB1.38 billion.

As at Dec 31, PwC noted that the group had total cash and cash equivalents of RMB361.8 million which is expected to be used for meeting the group’s working capital requirements and capital commitments.

PwC says if the company is unable to reach a settlement agreement with the bondholders, or if the group is unable to finance the settlement that will be agreed with the bondholders, the group and the company may be unable to continue in operational existence for the foreseeable future.