Coral seeks AIM listing ahead of potential bid
CORAL Products has announced that it wants to move from the Official List of the London Stock Exchange to the more junior Alternative Investment Market (AIM) in a bid to cut its costs.
The Haydock-based manufacturer of plastic products has issued a circular to shareholders convening a general meeting to approve its plan on July 18 and in the meantime has suspended its shares from trading on the Official list.
The company said that the move was part of its ongoing strategy review and was “the next step in its broader plan to restore the company to profitability and growth”.
It said that as part of its turnaround strategy, it has identified a “profitable, privately-owned” acquisition target which also products plastic products but due to its size the deal would count as a reverse takeover. Once its shares are listed on AIM, such a transaction would be simpler and cheaper to carry out.
However, it added that regardless of whether any deal might proceed, a transfer to AIM “will provide a market and environment more suited to the company’s size”.
“The Board also believes that AIM will offer greater flexibility, particularly with regard to corporate transactions, and should therefore enable the company to agree and execute certain transactions more quickly and cost effectively.”
Last month, Coral Products announced a widening of pre-tax losses to £753,000 (£602,000) and a steeper drop in earnings which it blamed on the ongoing decline in its (previously core) market for CD jewel cases. However, it said that it had made good progress in diversifying into other, more profitable areas such as plastic boxes used for recycling collections.
