Wednesday, September 17, 2008

ABC Learning Shares Still Suspended

The ABC Learning (ABS) saga continues. Regular readers of Australian Stock Market Investing will know I've developed a fascination with this company as evidenced by my posts on their share price crash, the continued stock price slide, the share price recovery and finally the IMF Class Action against ABC Learning. It feels like I've been watching a car crash in slow motion. The shenanigans that have gone on here are worthy of the best (or worst) daytime soap operas.

ABC last traded at 54 cents after an alarming share price drop over the past year. The share price graph below does not paint a pretty picture - especially if you're an ABS shareholder.

ABC Learning Stock ChartABC Learning Share Price Chart

Next I'll bring you up to date with the latest developments.

ABC requested a trading halt on 21 August, which the ASX granted.

On 25 August, ABS shares were suspended from official quotation at the company's request so the company could:
"finalise its full year results and prior period adjustments arising out of a re-assessment of accounting treatments"
The voluntary suspension was meant to last for 4 days (it's now mid-September).

Then on 29 August, ABC Learning announced it was still not in a position to release its annual results and therefore would not be able to comply with ASX Listing Rule 4.3. Listing Rule 4.3 says that a company must provide its Annual Results within 2 months of the close of the accounting period, subject to a number of exceptions. For those purists out there who want this stuff straight from the horses mouth, you can read more about Listing Rule 4.3.

The most recent announcement on 9 September indicates results should be available by the end of September 2008. They also announced the appointment of a new Chief Financial Officer (CFO) - Peter Trimble. Is that a hospital pass or what?

While there's been no official word, apparently sources have told the Sydney Morning Herald that the release of the annual accounts have been delayed over questions of the company's solvency. Ernst & Young have taken over the audit role from Pritcher Partners and the rumor is that KPMG has been called in as arbiter over a dispute about the correct accounting treatment of some items.

I'm sure the last thing Eddie Groves and the ABC Learning board want is for Ernst & Young to issue a qualified audit opinion, especially if the qualification relates the company's status as a going concern.

Having said all of that, provided ABC doesn't become the Australian stock market's latest corporate fatality, it may be an interesting situation. It operates what should be a profitable business. I believe there is a board restructure taking place and if they were able to reduce their debt to more realistic levels and concentrate on the Australian business, who knows - maybe something beautiful can grow...

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