AirAsia X shares sink as much as 21% amid going concern doubt

AirAsia X Bhd.’s shares dived by the most in more than a year after the long haul budget airline was officially categorized as a financially distressed firm, which gives the company a year to recast its finances or risk losing its Malaysian listing. The stock tumbled as much as 21.1% to 7.5 sen on Monday, set for the steepest drop since August 2020. On Friday, AirAsia X’s auditor Ernst & Young issued a disclaimer of opinion on the airline’s audited financial results for the 18-month period ended June 2021, citing threats that cast “significant doubt” on the firm continuing as a going concern, the airline said in a filing. AirAsia X said it has a year to recast its finances, failing which it will be delisted from Bursa Malaysia. “AirAsia X continues to face severe liquidity constraints and all hopes are on successful debt restructuring and new equity funding from existing and new investors to provide sufficient capital to restart operations when international borders reopen,” Public Investment Bank wrote in a note on Monday. The brokerage maintained its stock-target price of 1 sen. On Friday, AirAsia X’s auditor Ernst & Young issued a disclaimer of opinion on the airline’s audited financial results for the 18-month period ended June 2021, citing threats that cast “significant doubt” on the firm continuing as a going concern, the airline said in a filing. AirAsia X said it has a year to recast its finances, failing which it will be delisted from Bursa Malaysia. “AirAsia X continues to face severe liquidity constraints and all hopes are on successful debt restructuring and new equity funding from existing and new investors to provide sufficient capital to restart operations when international borders reopen,” Public Investment Bank wrote in a note on Monday.<br/>