OIO — financial distress indicators
Financial-health summary
OIO's reported numbers place it in the 'Very weak' financial-health band (distress score 74/100). The main indicators are operating profit does not cover interest, market-implied default probability >20% and severe working-capital shortfall. Independently, the Ohlson accounting model puts its 1-year failure probability at 95% and the market-implied (Merton) default probability is 25.6%. In its favour: operating cash flow is positive over the latest 12 months.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Interest coverage (EBIT / interest) is -16.73×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Merton distance-to-default 0.66 σ → PD 26%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Current ratio is 0.19 (current assets cover 19% of near-term obligations).
Cash-flow insolvency test: inability to pay debts as they fall due is the trigger for both U.S. involuntary petitions and Indian IBC default.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Price is -86% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
O-score 2.86 → model probability 95%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
- High insider/promoter ownership (91%) aligns management with survival.
📰 Recent news scan
- De Tomaso Advances Next-Generation V12 Programme with ItaltecnicaYahoo Finance · 2026-07-14
- OIO Group Enters into Term Sheet for Proposed Strategic Acquisition of German Specialist Automotive Engineering and Production PlatformYahoo Finance · 2026-05-13
- OIO Group Announces New Leadership, Board Appointments and Strategic Roadmap for Ultra-Luxury Mobility PlatformYahoo Finance · 2026-05-01
- OIO Group Announces Post-Closing Shares Outstanding Following Business CombinationYahoo Finance · 2026-04-28
- OIO Group Completes De Tomaso Business Combination, Establishing New Control and Strategic Platform for GrowthYahoo Finance · 2026-04-23
- OIO Group Announces Reverse Stock Split Ahead of Nasdaq Listing and De Tomaso Business CombinationYahoo Finance · 2026-04-22
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do OIO's financial-health indicators show?
As of 2026-10-08, OIO's public financial data places it in the 'Very weak' band with a distress score of 74/100, driven by operating profit does not cover interest, market-implied default probability >20% and severe working-capital shortfall. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is OIO's financial distress score?
74/100 ('Very weak'). Ohlson O-score 2.86 (model 1-year failure probability 95%). Merton distance-to-default 0.66 σ (model default probability 25.6%).
What works in OIO's favour?
Operating cash flow is positive over the latest 12 months. High insider/promoter ownership (91%) aligns management with survival.
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
Other Unclassified companies with distress indicators
- CNEY (CNEY)Very weak 100/100
- EPOW (EPOW)Very weak 100/100
- GIBO (GIBO)Very weak 100/100
- GNS (GNS)Very weak 100/100
- HKPD (HKPD)Very weak 100/100
- HUBC (HUBC)Very weak 100/100
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.