Blue Sky in trading halt ahead of major review

Written on the 12 June 2018 by Ben Hall

Blue Sky in trading halt ahead of major review

Shares in Blue Sky Alternative Investments (ASX: BLA) have been placed in a trading halt as the embattled fund manager prepares to release a company review and balance sheet update to the market.

The Brisbane-based Blue Sky requested the trading halt until the release of the review or until the open of trading on Thursday.

The review is being carried out as the the company tries to recover from a share price and market capitalisation wipeout of around 80 per cent following the release of a controversial report from a US short seller in March.

The Glaucus Research report claimed Blue Sky "wildly exaggerated" its fee earning assets under management (FEAUM) and that its share price was worth just $2.56.

When the report was released BLA shares were trading at around the $11.50 mark, off an all time high of $14.99, and since then they have slumped to $2.24.

The company last week announced that KPMG is carrying out an independent valuation review of all its assets but is not advising Blue Sky on its business model or management structure and the review is part of a comprehensive review process announced last month.

Glaucus Research claimed that Blue Sky's estimate of $4 billion in FEAUM was overstated by $2.5 billion.

As the share price plunged, the fallout led to two board purges and the resignations of managing director Robert Shand, followed by chairman John Kain, along with board members Elaine Stead and Nicholas Dignam.

Veteran board member Michael Gordon resigned for health reasons.

Last month the company announced it expects its full year net profit after tax (NPAT) for 2018 to be lowered by $7 million just a week after it abandoned guidance because of the turmoil caused by the Glaucus report.

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Business News Australia

 
Author: Ben Hall

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