Quick take: Magna Prima falls after listeners point to ‘significant uncertainty’
KUALA LUMPUR: Actions in Magna Prima Bhd fell more than 2.4% at the start of trading on Monday after its independent auditor highlighted significant uncertainty over its financial statements ended Dec.31, 2020 (FY20).
The real estate developer fell 2.48%, or 1.5 sen to 59 sen. Since the start of the year, it has fallen by some 32.9%.
MM. HLB Ler Lum said that the group’s and the company’s current liabilities exceeded its current assets by RM 108.37 million and RM 309.19 million, respectively from FY20.
He also noted that the group and the company suffered a net loss of RM 152.20 million and RM 17.78 million respectively for FY20.
HLB Ler Lum also noted that three subsidiaries delayed payment of their loans during the year.
In addition, the group and the company are involved in several pending litigation, including a claim over unpaid balances on tax debt owed to the Inland Revenue Board and a claim over liquidated and ascertained damages owed to buyers.
To address these issues, Magna Prima said its directors and management team have taken steps to turn the company around and improve its performance over the next three years.
Separately, Magna Prima has offered a private placement of up to 20% of its issued shares to raise up to RM36.59 million for debt repayment and working capital.