3 Lilama stocks will be delisted in May 2024. Illustrative photo.
The Hanoi Stock Exchange (HNX) has announced that it will delist three stocks belonging to the Lilama group: L61 of Lilama 69-1 JSC; L62 of Lilama L69-2 JSC (L62); and L43 of Lilama 45.3 JSC.
In particular, 7,576,200 L61 shares of Lilama 69-1 JSC will be delisted from May 17, 2024, due to the auditing company’s refusal to express an opinion on the 2023 financial statements. This case falls under the mandatory delisting regulations.
The reasons for the refusal to express an opinion on the 2023 financial statements are firstly, issues that indicate material factors that raise doubts about the Company’s ability to continue operating. However, the Company’s financial statements are still presented on a going concern basis.
Specifically, L61 has suffered consecutive losses for 2 years, with accumulated losses exceeding VND 119 billion by the end of 2023, 1.6 times higher than the owner’s equity; total liabilities of over VND 681 billion, which is VND 28 billion higher than current assets.
The Company’s total overdue accounts payable is VND 544 billion. In 2023, the Company incurred a net loss of nearly VND 49 billion, with a negative net cash flow of VND 829 million.
For overdue loans and financial leasing debts, banks have initiated lawsuits against the Company in court and requested the handling of secured assets and all other legal assets of the Company to recover debts in accordance with the law.
The second issue is that as of 1/1/2023 and 31/12/2023, the Company is recognizing work-in-progress costs of construction projects under the inventory item on the balance sheet for amounts of nearly VND 496 billion and over VND 482 billion, respectively. However, the auditor stated that sufficient appropriate evidence had not been collected to determine the accuracy of the value of the work-in-progress of the projects at the two aforementioned points in time, as well as the basis for cost of goods sold in the corresponding year. Therefore, the auditor could not assess the appropriateness or make necessary adjustments (if any) to the inventory item and other related items in the Company’s financial statements.
Along with the reason for the auditor’s refusal to express an opinion on the 2023 financial statements, 8,298,243 L62 shares of Lilama 69-2 JSC will also be delisted from May 23.
According to the auditor, as of December 31, 2023, the balances of overdue accounts receivable that had not been provided for, and the value of work-in-progress that could not be determined to be provided for in the 2023 financial statements of L62 were approximately VND 103.18 billion and VND 82.15 billion, respectively; Accounts receivable from customers, advances from buyers, accounts payable to vendors, advances to vendors, other receivables, prepayments, other payables, and deferred income as of December 31, 2023 had not been reconciled by approximately VND 97.94 billion, VND 25.86 billion, VND 54.18 billion, VND 25.52 billion, VND 10.61 billion, VND 12.34 billion, and VND 3.21 billion, respectively.
Accordingly, the auditor did not express an opinion on the existence, completeness, and fairness of these items as of December 31, 2023, or their impact on other items used as comparative figures as of January 1, 2023, and other items presented in the Company’s consolidated financial statements.
Furthermore, as of December 31, 2023, L62’s short-term liabilities exceeded its current assets by approximately VND 99.46 billion, and the Company has incurred an accumulated loss since its establishment up to December 31, 2023 of approximately VND 137.3 billion, resulting in a negative owner’s equity of approximately VND 31.1 billion. In addition, the Military Commercial Joint Stock Bank (MB) has filed a lawsuit against the Company in the Hong Bang District People’s Court, Hai Phong City because the Company could not pay its debts on time. This raises doubts about the Company’s ability to continue operating in the future. As of the date of this consolidated financial statement, the Company was still working with Vietnam Debt Trading JSC (DATC) to restructure its loans and financial leasing debts. The Company’s ability to continue operating depends on the outcome of this restructuring event. As of the date of issuance of this report, the auditor had not gathered sufficient appropriate evidence to express an opinion on the Company’s ability to continue operating in the future.
Due to the above reasons, the auditor has refused to issue an audit opinion on L62’s 2023 financial statements.
In the case of Lilama 45.3 JSC, due to continuous losses over a three-year period from 2021 to 2023, 3.5 million L43 shares will be delisted from May 23 according to regulations. in L43’s 2023 financial statements, due to continuous losses, the total accumulated losses as of December 31, 2023 of this enterprise exceeded VND 22.07 billion.
Regarding the price movements on the market, at the end of the trading session on May 2, 2024, the three stocks L61, L62, and L43 were priced at VND 2,700 per share, VND 2,000 per share, and VND 2,200 per share, respectively.
