As of today, Chief Strategy Officer of Amaysim Australia Limited – Alexander Feldman – has solicited a trading halt. Unless the ASX decides otherwise, the securities of Amaysim will remain in limbo. With the share value subsiding, is the trading halt necessarily doom and gloom?
In line with listing compliance, Amaysim advises that the reasoning behind the recently imposed halt is twofold. Primarily, the trading halt was imminent as Amaysim is currently considering raising capital via an entitlement offer in conjunction with the release of its half-year results scheduled for Tuesday 26th February. Additionally, the alleged capital raising is to, in turn, enable and accelerate the execution of strategic growth initiatives in its mobile and energy business and to refinance its existing debt facilities which are due on the 31st of March.
In light of recent actions, trading halt analysis can at times be significantly misleading if used to make inferences about the firm’s sustainability in terms of its financial legitimacy. However, the analysis of trading halts may be a good way to study the efficiency of the supervisory activity as a whole, where regulators and exchanges have the most significant role to play.
Suffice to note the competitive nature founded within the telecommunications industry, Amaysim had a transformational 2018. The company itself retained its spot as the country’s fourth largest mobile service provider with more than 1 million users, however, made more of its net returns from its energy venture. Nonetheless, shares continue to trade below $1 each – and not a long way off record lows. There is some concern levied against Amaysim’s outlook, while others suggest its balance sheet could use an equity injection.
Relative to mobile and energy, broadband and devices are capital intensive businesses and due to prevailing market conditions, Amaysim broadband and devices are expected to deliver low returns. Amaysim desires that the trading halt continue until the firms itself releases an announcement in relation to the halt, and in any event, until no later than the commencement of trading on Tuesday 26th of February, the supposed release of their annual report.