Korea’s Asiana Airlines share trading halted after auditor’s qualified opinion

23-Mar-2019 Intellasia | Reuters | 6:00 AM Print This Post

The Korea Exchange has suspended trading in shares of Asiana Airlines Inc, after an auditor for South Korea’s second-biggest carrier said it lacked enough information to judge its value.

“Based on the report of Asiana Airlines’ auditing firm Samil PwC, the scope of the audit was limited as the auditor could not obtain comprehensive evidence to decide the value of the airline,” said an official at the Korea Exchange.

Trading will resume on Tuesday, the bourse said in a regulatory filing late on Thursday.

The suspension sent shares of maintenance affiliate Asiana IDT Inc tumbling as much as 14.9 percent, while budget affiliate Air Busan Co Ltd lost 1.8 percent. The benchmark KOSPI index was largely flat.

In a qualified opinion, Samil PwC said it did not sign off its audit of the airline because it was not provided with enough details about aircraft leases, maintenance, and the evaluation of the value of acquisitions made in 2018.

Asiana Airlines in a statement said it will call on the auditor to reach a swift resolution.

“Compared with rivals such as market leader Korean Air Lines Co Ltd, Asiana operates a relatively high proportion of leased planes, which are accounted for as debt and therefore impact financial stability,” said Um Kyung-a, a senior analyst at Shinyoung Securities.

Aircraft aside, Asiana has significant debt which it needs to clear, through, for instance, selling high-value affiliates, Um said.

The airline’s financially troubled parent, Kumho Asiana Group, sold its headquarters in central Seoul last year to cut debt built up by aircraft purchases and competition with budget carriers.

When the bourse imposed the trading halt, Asiana’s shares were priced 4,040 won ($3.58).

https://www.reuters.com/article/us-asiana-airlines-auditor/south-koreas-asiana-airlines-share-trading-halted-after-auditors-qualified-opinion-idUSKCN1R308H

 


Category: Korea

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