ASTRO SHARES FALL AFTER RM734.88 MLN TAX BLOW

KUALA LUMPUR, July 12 (Bernama) -- Astro Malaysia Holdings Bhd shares fell two sen to 29 sen at the close on Friday after the pay TV operator was slapped with an additional tax bill of RM734.88 million.

At 5 pm, a total of 42.35 million shares were transacted.

The Inland Revenue Board (LHDN) is seeking additional taxes from the Astro group for the years of assessment 2019 to 2023 totalling to RM734.88 million, including penalties.

In a filing with Bursa Malaysia yesterday, Astro said additional assessment notices were served on the company’s wholly-owned subsidiaries, Astro Shaw Sdn Bhd and Measat Broadcast Network Systems Sdn Bhd, on July 9 amounting to RM22.01 million and RM712.87 million, respectively.

The content and entertainment company said its subsidiaries have 30 days to appeal and will do so.

If required, they will initiate legal proceedings to challenge the basis and validity of the notices raised by LHDN, it added.

According to Kenanga Investment Bank Bhd (Kenanga IB), in the worst case, this additional tax liability will push Astro’s net tangible assets by 14 sen deeper into negative territory to -27 sen from -13 sen as of April, 2024.

“Assuming a full settlement, Astro’s net debt and gearing of RM3.1 billion as of end-April 2024 will rise to RM3.8 billion. (This is) assuming debt is raised to pay for the additional taxes,” it said in a note.

Kenanga IB maintained its forecasts pending the outcome of the appeal as well as “underperform” call on Astro with a target price of 25 sen.

-- BERNAMA