Engineering company Downer EDI Ltd discloses it has sufficient available funds to liquidate despite reports that the company has withheld payment orders to meet targets for cash flow for the company's financial accounts at the end of the fiscal year.

In an official statement to the Australian Securities Exchange this Tuesday, the company comments: "Downer has ample liquidity with in excess of $600 million in available facilities and cash balances."

Downer EDI also disclosed that its Works Australia department is projected to pay all of its creditors as per creditor term agreements while meeting its targets for internal cash funds.

According to media reports by Fairfax this Tuesday, one of the major divisions of Downer EDI had cut supplier payments worth around $35 million to meet money flow targets for the fiscal year's ending and prevent a probable outflow of net cash.

Downer clarifies that the mentioned $35 million in the media reports is actually related to collectable debtors that have been identified, and not as creditors as speculated, and a significant part of this amount was projected to be obtained by the end of the fiscal year.

Downer EDI adds: "Downer will continue to manage its debtors and creditors to ensure a strong and balanced focus on total management of working capital."

On Tuesday, 1041 AEST, the company's shares were 3.76 per cent lower by 15 cents, and posted at $3.84.