Having been hit by a slew of bad news on Tuesday afternoon in London, things were not looking too good for shareholders in aircraft parts wholesaler Aero Inventory.
Not only is the inventory valuation issue, that saw Aero stock suspended on Monday, bigger than first thought, the company’s lenders seem to have brought the shutters down and the board is reviewing the position of its chief executive, finance director and chief operating officer.
All the ingredients then for another Aim market disaster.
From RNS — the Aero statement in full: Further to the announcement on 26 October 2009, the board of the Company is now providing an update.
The preliminary results of the ongoing accounting and stock reconciliation investigations show that the stock valuation issue highlighted in the previous announcement is now broader than first thought. The issue appears to involve not only the accounting book value of stock but also in some instances physical quantities. The Board is also reviewing the accuracy of recent financial reports provided to its banks.
These reviews are ongoing and the consequences whilst being evaluated still remain uncertain. Discussions with the Group’s banks continue. In particular the Group is waiting to hear from its banks regarding the Group’s ability to access credit and their ongoing financial support.
The board has made the following appointments. Colin Trupp, previously Business Development Director, has been appointed as acting chief executive and Swag Mukerji has been appointed on an interim basis with responsibility for the Group’s financial operations. Swag Mukerji is an experienced finance director having previously worked with the Priory Group and Biocompatibles International plc.
The board is reviewing the positions of Rupert Lewin (Chief Executive), Hugh Bevan (Finance Director) and Martin Dodge (Chief Operating Officer).
Just think — in 2008 the company was given the “Best use of Aim” award and last June rebuffed an approach from Bridgepoint, the private equity group, which was pitched at around 720p.
The shares were suspended at 264p last week and one has to wonder if they will ever trade again.
Related link:
Aero Inventory – Statement re. Suspension – RNS