KUALA LUMPUR (Oct 30): Maxland Bhd (KL:MAXLAND), formerly known as Priceworth International Bhd, has had a material uncertainty flagged by its external auditor that cast doubt over the integrated timber operator’s availability to continue as a going concern.

Messrs PKF highlighted Maxland’s net loss of RM61.18 million for the eighteen-month period ended June 30, 2024 (FY2024) and its current liabilities exceeding assets by RM69.82 million.

“These events or conditions, alongside with other matters, indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern,” it said in a bourse filing on Wednesday.

The “other matters” the auditor referred to relates to Maxland’s material obligation of RM59.63 million payable to a third-party creditor included in its current liabilities, which stands at RM117.44 million.

It noted the group has not complied with the repayment terms of the material obligation’s settlement agreement and does not have the ability to settle the amount.

Towards mitigating the existence of the material uncertainty and its obligation within the next 12 months, the auditor noted that Maxland has undertaken a bonus issue of warrants.

The exercise consisted of the issuance of 801.81 million free warrants, on a basis of one for every two shares in Maxland, at an exercise price of 11 sen per warrant or potential proceeds of RM88.2 million, assuming all warrants are exercised. 

The auditor also noted that Maxland intends to return to profitability within the next 12 months.

Shares in Maxland ended half a sen or 9.09% lower at five sen, valuing the company at RM80.18 million.