This article first appeared in The Edge Financial Daily on December 4, 2019 - December 10, 2019

KUALA LUMPUR: Parkson Holdings Bhd’s 67.96%-owned Singapore listed subsidiary, Parkson Retail Asia Ltd (PRA) has been placed on the Singapore Exchange’s (SGX) watch list, after PRA issued a notice in October that it had been loss-making for three consecutive years.

The watch list inclusion takes effect today, an announcement by PRA to the SGX stated, which Parkson filed with Bursa Malaysia.

“The board of directors of Parkson Retail Asia Ltd (the company) wishes to announce that following the Notice of 3 Consecutive Years’ Losses released by the company on Oct 7, 2019, the Singapore Exchange Securities Trading Ltd (SGX-ST) has notified the company that it will be placed on the watch list with effect from December 4, 2019.

“The company must take active steps to restore its financial health and meet the requirements of Listing Rule 1314 (1) within 36 months from December 4 failing which the exchange would delist the company or suspend trading in the company’s shares with a view to delisting the Company,” said PRA executive chairman Tan Sri William Cheng Heng Jem in the PRA announcement.

Listing Rule 1314(1) states that an issuer may apply for its removal from the watch list if it records consolidated pre-tax profit for the most recently completed financial year (based on the latest full-year consolidated audited accounts) and has an average daily market capitalisation of S$40 million (RM122.49 million), or more, over the last six months.

Parkson, in turn, said PRA’s inclusion in the watch list will not have any impact on the group’s earnings for the financial year ending June 30, 2020, or its net assets.

Parkson shares slid half a sen lower or 2.17% to 22.5 sen yesterday, valuing it at RM246.12 million. PRA, meanwhile, fell 11.11% to S$0.008, valuing it at S$5.39 million.