This article first appeared in The Edge Malaysia Weekly on November 22, 2021 - November 28, 2021

Impiana Hotels Bhd is yet another casualty of the pandemic. The hospitality operator said on Nov 11 that it had triggered the prescribed criteria of Practice Note 17 (PN17) under the Main Market Listing Requirements, though it will not be classified as a PN17 company given the temporary relief measures extended by the stock exchange.

Impiana Hotels was formerly known as Bio Osmo Bhd that had, as its core business, osmosis drinking water. The name change to Impiana Hotels took place in April 2019 after the acquisition of Impiana Group’s hotel assets and the disposal of the bottled water business.

A year later, Impiana Hotels was brought to its knees as the pandemic struck and caused global lockdowns.

The group’s financial statements for the financial year ended June 30, 2021 (FY2021), have also been flagged by its auditor due to a material uncertainty as to whether it can continue as a going concern. Its shareholders’ equity deficit of RM41.596 million as at end-June is less than 50% of its share capital of RM456.23 million.

This was despite a lower net loss of RM10.75 million in FY2021 against RM56.6 million in FY2020.

At the height of the pandemic, the group in August 2020 proposed to diversify its core business to property development in view of the ongoing redevelopment of Impiana Residences Cherating, which is being undertaken over three phases.

With lower contribution from its hospitality business — about 10 hotels across Malaysia, Indonesia and Thailand — as a result of the lockdowns, property development has played a major role in pushing the group’s financial performance through the sale of service suites.

Nonetheless, Impiana Hotels may continue to bear the brunt of the pandemic as the pace of recovery in the tourism sector remains uncertain. Potential spikes in coronavirus cases will definitely take a toll on the reopening of the tourism sector.

There seems to be no silver lining in sight for the group in the near term.

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