AIRASIA Group Bhd’s (AAGB) share price closed 17% lower to 70 sen after its auditor raised concerns over the low-cost carrier’s ability to continue doing business.
Ernst & Young issued an audit opinion stating that the airline’s 2019 earnings were prepared on a going concern basis, which is dependent upon recovery from the Covid-19 pandemic and the success of fundraising efforts.
AAGB responded by saying in a statement that Bursa Malaysia had granted it 12 months relief from being classified as a financially distressed firm – a classification that would require it to submit a business improvement plan.
Bursa has also extended the relief to other companies that have been hit by the pandemic.
AAGB’s liabilities exceeded its assets by RM1.84 bil at the end of 2019, E&Y said in its unqualified opinion. An unqualified opinion means the auditor believes a company has prepared its statements fairly.
AAGB’s shares are down 58.5% this year, giving the discount carrier a market capitalisation of RM2.36 bil. Its 52-week low is 50 sen. – July 8, 2020
