Avanti: Share price meltdown
August 20, 2019
By Chris Forrester
London-based speciality satellite operator Avanti Communications says it wants to cancel its listing of its ordinary shares from the London ‘junior’ exchange Alternative Investment Market. It made the announcement early on August 20th.
Avanti says: “The proposed cancellation is part of the ongoing transformation of the Company as the Directors believe the currently market valuation does not reflect the recent progress the Company has made, the value of the Group’s satellite assets, or the current market opportunity.”
Avanti added that the requirements of the AIM listing take up significant management time, legal and regulatory obligations, and comes with material financial costs (such as professional fees, London Stock Exchange fees and other costs associated with being an AIM-traded company) that the Independent Directors believe are disproportionate to the benefits to the Company.
“The Independent Directors believe that the Cancellation is in the best interests of the Company and intend to unanimously recommend that Shareholders vote in favour of the Resolution at the General Meeting. The Company has received irrevocable undertakings to vote in favour of the Resolution from certain shareholders in respect of an aggregate of 1,345,749,427 Ordinary Shares, representing approximately 62 percent. of the existing issued share capital of the Company,” stated Avanti.
“The Cancellation requires the approval of not less than 75 percent of the votes cast by Shareholders (whether present in person or by proxy) at the General Meeting to be convened for this purpose at 9.30 a.m. on 5 September 2019 at the Company’s registered office at Cobham House, 20 Black Friars Lane, London EC4V 6EB. If the Resolution is passed at the General Meeting, it is anticipated that the Cancellation will become effective, following the issue of a Dealing Notice, at 7.00 am on 18 September 2019.”
“The poor performance of the share price over the last 12 months has resulted in a market capitalisation of approximately £26 million which the Directors believe no longer accurately reflects the Company’s value. The Independent Directors believe that this under-valuation negatively impacts on customer and supplier engagement. Furthermore, this negative sentiment and under-valuation of the Company’s equity may ultimately impact on the Company’s vision to deliver on its medium-term strategic objective.”
The news prompted an immediate sell-off of Avanti’s shares, and a shareprice crash of 42 per cent from the previous – and miserable – 70p, to 50p.
The operator’s half-year numbers are due on September 27th.