KUALA LUMPUR (July 9): London Biscuit Bhd slumped 27% this morning after the group said yesterday that it has become a Practice Note 17 (PN17) company, following its default of a debt payment of RM9.83 million to Bank of Nova Scotia Bhd on July 3.
At 9.50am, London Biscuits fell 7.5 sen to a fresh record low of 16.5 sen, giving it a market capitalisation of RM47.98 million.
Meanwhile, shares of its 20%-associate Khee San Bhd also fell one sen or 2.82% to 34.5 sen, for a market capitalisation of RM35.88 million.
London Biscuits has not been able to provide a solvency declaration to Bursa Malaysia following its default to Nova Scotia Bank.
With the PN17 status triggered, the confectionery manufacturer is required to submit a regularisation plan to the Securities Commission Malaysia or Bursa within the next 12 months.
Back in February, the group's external auditor Nexia SSY raised a few concerns through its qualified opinion on the group's financial statements for the financial year ended Sept 30, 2018 (FY18).
This includes inability to confirm its inventories of RM26.89 million at end-FY18, as well as insufficient audit evidence for recorded acquisitions of plant and machinery totalling RM52.47 million in the year.
London Biscuits had appointed another external auditor in March to assess the red flags raised by Nexia within an expected three-month period.