Parkson Retail Asia draws SGX query for unusual trading activity

MAINBOARD-listed South-east Asian department store retailer Parkson Retail Asia has drawn a query from the Singapore Exchange (SGX)  over the unusual volume movements in the trading of its shares on Wednesday.

Shares in the usually illiquid stock surged 114.29 per cent or 0.8 Singapore cent to S$0.015 on volume of 30.3 million on Wednesday, sparking the query.

In reply, the group said that it is not aware of any information not previously announced that might explain the unusual volume movements in trading activity.

The group is in a negative working capital position and negative equity position, with a loss - net of tax for the nine months ended March 31, 2020 - of approximately S$27.7 million.

In a separate query, the SGX asked Parkson Retail Asia to describe its ability to meet its short-term debt obligations as and when they fall due.

The group replied that it has had rent-reduction negotiations with landlords and payment-restructuring negotiations with its suppliers in light of the Covid-19 outbreak.

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Most of the group's debts are amounts owing to suppliers, and the group has "quite a cordial relationship with its suppliers generally", it said. It can thus negotiate with suppliers amicably if it encounters payment issues, it said.  

The SGX also queried the group on its ability to operate as a going concern.

The group replied: "The group has secured continued financial support from the ultimate holding company, Parkson Holdings Berhad, to continue operate as a going concern. The group is also trying its level best to generate sufficient cash flow from its operations to meet its obligations as and when they fall due."