Following the PN17 announcement, Zelan now has to submit a regularisation plan to the authorities within 12 months or face suspension of its shares trading, or a possible delisting from the local bourse.
According to a filing with Bursa on April 30, Zelan said it is taking the necessary steps to address its PN17 status.
“The company is in the midst of formulating a plan to regularise its financial condition and the announcement on the same will be made in due course in accordance with the Listing Requirements,” the announcement stated.
Based on the April 30 filing, Zelan had triggered the prescribed criteria pursuant to PN17 rules on the Main Market Listing Requirements after its external auditors Nexia SSY PLT expressed a disclaimer of opinion on its audited financial statements for the financial year ended Dec 31, 2022 (FY2022).
Nexia had pointed out, in Zelan’s latest annual report filed on April 30, that the company’s subsidiary Zelan Holdings (M) Bhd showed a net balance receivables amounting to RM241.76 million as at the end of December 2022.
The balance pertains to Zelan’s project in Abu Dhabi and United Arab Emirates and derived from a gross amount of RM322.2 million and after impairment of RM80.44 million.
“The receivables of RM241.76 million needs to be fully impaired. Consequently, these adjustments would cause the total assets of the group to be reduced from RM801.32 million to RM559.56 million and the total liabilities of the group of RM715.72 million will exceed the total assets by RM156.16 million,” said the annual report.
Zelan reported a net loss of RM5.6 million for FY2022 versus a net profit of RM4.06 million in FY2021. Its revenue, meanwhile, dropped slightly to RM45.44 million from RM45.9 million in FY2021.
At market close today, Zelan’s share price has fallen 50% year-to-date to 3.5 sen, giving it a market capitalisation of RM27.11 million.
Bursa said in a statement today that it will continue to monitor Zelan’s progress in respect of the latter’s compliance with the Main Market Listing Requirements.
As at May 2, there are a total of 28 companies under PN17 classification and one company under Guidance Note No. 3 of Bursa’s ACE Market Listing Requirements.