Ivory Properties Group Bhd, a property developer based in Penang, has been designated as a financially troubled company under Practice Note 17 (PN17).
According to a recent stock exchange filing, the company's external auditors, Messrs KPMG PLT, issued a disclaimer of opinion on its audited financial statements for the fiscal year ended March 31, 2022 (FY22).
Ivory Properties announced its admission into PN17 in a stock exchange filing on August 1 after Messrs KPMG PLT raised material concerns about the company's ability to continue as a going concern.
Ivory Properties has several property projects in Penang and stated in September 2021 that it is optimistic about its prospects for 2022.
The Crown Penang in Straits Quay, The Millennium in Batu Uban, and The Wave at Penang Times Square are among its projects.
The Crown Penang is a soaring 40-story serviced suite worth RM340 million that sits on 0.81 hectares (ha) of prime land, while The Millennium is a mixed-use development worth RM950 million.
The Wave at Penang Times Square has an RM500 million GDV and was scheduled to be completed in the first quarter of this year.
The Grand Connaught in Cheras and Avenue 8 in Sungai Besi (both in Klang Valley) are two new projects that the company has reportedly stated will be completed by 2026.
Ivory Properties reported a net loss of RM79.51 million during FY22, with liabilities exceeding current assets by RM60.22 million, according to KPMG.
The auditors also noted that the company had RM1.67 million in cash and bank balances as of March 31, 2022, while it had negative operating cash flows of RM8.9 million in FY22.
According to KPMG, Ivory Properties had difficulties obtaining financing for its project developments and property acquisitions during the current fiscal year, as well as the termination of certain agreements and the forfeiture of deposits.
As a result, the company failed to repay interest and principal payments totaling RM1.98 million for various loans and borrowings, the total outstanding amount being RM49.73 million.
In the independent auditor's report filed to Bursa by Ivory Properties on July 29, KPMG stated that the above events and conditions indicate the existence of material uncertainties, casting significant doubt on the company's ability to continue as a going concern.
Ivory Properties stated that it is taking the necessary steps to develop a regularisation plan to regularise its financial situation, which it hopes to submit to the appropriate authorities by the end of July 2023.
The regularisation strategy includes a fund-raising campaign to raise capital for working capital and project expenses.
The company also stated that it will maintain its austerity measures focusing on cost savings to reduce monthly cash burn rate, as well as engage with financial institutions and secured lenders to discuss loan restructuring to avoid payment default.
It also intends to meet with unsecured creditors to discuss debt restructuring.
"Barring any unforeseen circumstances, the group expects to resolve the issues relating to the disclaimer of opinion within the next financial year," it said in the filing.
Source: NST.com.myPrev. Article Next Article