March 12, 2019 (LBO) – Colombo Stock Exchange (CSE) listed HVA Foods (HVA) has been informed by the CSE that their stock will suspended from trading on March 21st if they do not rectify the modified audit opinion in the latest audited financial statements dated March 31, 2018 by March 19th next week.
HVA came public during the peak of Sri Lanka’s stock market bubble raising Rs300mn at Rs16/share. The stock currently languishes close to Rs3/share. When taking into account devaluation of the Sri Lanka rupee, in dollar terms those who invested in HVA’s IPO and held on have almost been completely wiped out.
The company has a suspect balance sheet with amounts due from related parties near the total equity in the company. For shareholders and banks who have exposure to HVA shares in margin accounts, a trading suspension could be a financially destructive event.
HVA is a tea company that has been continuously losing money, and subject to a significant debt burden. Analysts say future prospects for the firm don’t appear bright.