The AMA Group Ltd (ASX: AMA) share price is in the red today after the company knocked back media criticism.
AMA has acknowledged an unnamed media outlet's claims its business is in dire straits by pointing to its current capital structure review.
The company hopes its review will help it beat a massive $99 million dint in its bottom line, caused by the impact of COVID-19 and reported on in the company's financial year 2021 earnings report.
AMA's response hasn't seemed to quell the market. Right now, the AMA share price is 42 cents, 5.62% lower than its previous close.
Let's take a closer look at today's news that could be impacting the automotive smash repair and parts supplier's shares.
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What's weighing on the AMA share price?
The AMA share price is tumbling after it rebutted media reports.
While the company acknowledged a publication had questioned its capital position, it only repeated news already published within its financial year 2021 report.
While AMA didn't name the publication speculating on its finances, the Australian Financial Review (AFR) did report on them last night.
And it may be the AFR's reporting that's weighing on the AMA share price today.
Within the AFR's article, it noted AMA needs to restructure its debt before the end of the year – as the company previously announced.
However, the AFR reported the company is strapped for cash, a claim AMA hit back against. The AFR also claimed AMA's lenders are concerned with the company's annual report.
AMA's response to media speculation stated its banking syndicate is supportive of its business. It also noted AMA's directors are confident the capital structure review will result in positive findings. It said:
While the business is experiencing COVID-19 related repair volume decreases, these impacts are being actively managed. With $64 million in cash as at 30 June 2021 and a low level of net debt versus normalised earnings (pre-COVID-19 effects), the company's liquidity position remains strong. The group's insurer partners remain supportive, and we look forward to returning to normal operations as restrictions ease.
Unfortunately, AMA reiterating its confidence hasn't been enough to save its share price today.
