Ivory Properties slips into PN17 as auditor expresses disclaimer on FY22 financials

KUALA LUMPUR (Aug 1): Ivory Properties Group Bhd, whose external auditors have expressed a disclaimer of opinion on the company’s audited financial statements for the financial year ended March 31, 2022 (FY22), is now an affected listed issuer under Practice Note 17 (PN17).

The property developer, in announcing its admission into PN17 in a bourse filing on Monday (Aug 1), said it triggered the prescribed criteria of PN17 on Friday (July 29) after Messrs KPMG PLT flagged material uncertainties about Ivory Properties’s ability to continue as going concerns.

According to KPMG, Ivory Properties reported a net loss of RM79.51 million during FY22, while the group’s liabilities exceeded their current assets by RM60.22 million.

The auditors also noted that the group’s cash and bank balances as at March 31, 2022 stood at RM1.67 million, while the group recorded negative operating cash flows of RM8.9 million for FY22.

KPMG said that during the current financial year, Ivory had experienced difficulties in obtaining financing for its project developments and property acquisitions, termination of certain agreements and forfeiture of deposits.

Subsequently, KPMG said the group missed the repayment of interest and principal payments that amounted to RM1.98 million for certain loans and borrowings, of which the outstanding amount totalled RM49.73 million.

“The above events and conditions indicate the existence of material uncertainties, which cast significant doubt on the ability of the group to continue as going concerns,” KPMG said in the independent auditor's report filed to Bursa by Ivory Properties.

The group is taking the necessary steps to formulate a regularisation plan to regularise its financial condition and it endeavours to submit to the relevant authorities by the end of July 2023, said Ivory Properties.

The group will also continue its austerity measures focusing on cost saving to reduce monthly cash burn rate, as well as engage with financial institutions and secured lenders to discuss loan restructuring to avoid default in payment, it said.

In the mean time, it plans to engage 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 added.

On Monday’s closing, Ivory’s shares dropped 4 sen or 36.36% to settle at seven sen, giving the group a market capitalisation of RM34.31 million. Its share price has fallen 56.02% year-on-year.