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S&P places Mobileum on watch
S&P said it placed its ratings, including the CCC issuer rating, on Mobileum Inc. (Matrix Holdings Inc.) on CreditWatch with negative implications.
“The CreditWatch placement follows Mobileum's announcement that it breached certain covenants under its credit agreement, indicating that it provided incorrect financial statements to lenders and failed to maintain proper books of record. This follows an ongoing special committee investigation stemming from certain accounting issues related to revenue recognition irregularities from 2020 to 2022.
“While it is unclear how these accounting irregularities will affect its current 2023 financials, we believe there is heightened risk around its cash flow and liquidity because of weak earnings in 2023 due to declines in the company's nonrecurring revenue, as telecom operators delayed investments, coupled with headwinds from higher debt balances,” S&P said in a press release.
The agency said it aims to resolve the negative watch within 30 days.
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