AirAsia X may be delisted from Bursa Malaysia after its external auditor casts doubts on its ability to continue as a going concern.
Ernst & Young issued a disclaimer of opinion on AirAsia X’s accounts for the 18 months ended June 30, 2021, triggering its status as a financially distressed company under Bursa Malaysia’s Practice Note 17.
In a filing to the stock exchange, Ernst & Young expressed concern over the company’s financial position having reported a net loss of RM33.72bn with current liabilities exceeding assets by RM34bn. The company has also reported shareholders’ deficit of 33.6bn. The grounding of the fleet triggered defaults that have triggered claims of RM25.2bn. E&Y states that the company’s status as a going concern is highly dependent on it implementing its proposed RM64bn debt restructuring exercise, which is being put to a vote by its creditors on November 12, that E&Y says there is material uncertainty on the outcome of the meeting since 75% of creditors will need to agree to the restructuring. The company’s future is also highly dependent on its ability to raise fresh funding – up to RM150 million through a rights offering and a secondary share sale.
To avoid being delisted from Bursa Malaysia, AirAsia X would have to “regularize” its financial condition within 12 months.
“The company is taking the necessary steps to address its PN17 status,” AirAsia X said.