Optare cancels AIM listing
BUS manufacturer Optare has announced that it will be cancelling its admission to trade on the AIM of the London Stock Exchange.
The firm has said that they are not receiving the perceived benefits of being a listed company, such as access to equity capital markets and an “enhanced corporate profile.”
Major shareholder Ashok Leyland and the firm’s directors have decided that it was in the interests of the company not to continue.
It would normally require a 75% majority of the votes at a meeting of the shareholders to stop the listing. As holder of 75.3% of shares in the company, Mr Leyland has already undertaken to vote in favour of the cancellation.
Mr Leyland is being relied upon to support the company, providing a £5.1m short term loan facility, a £1.5m loan in 2014 to undertake product development, and a corporate guarantee of the firm’s £15m term loan with Barclays Bank.
The firm stated that they relied too much of Mr Leyland, making it challenging to raise any further equity capital other than from him.
A statement from the firm said: “The AIM listing of ordinary shares is not in reality offering investors the opportunity to trade in meaningful volumes in the market.
“This has been demonstrated by the limited trading volume in the ordinary shares, with just 0.3% of the issued ordinary share capital of the company having been traded daily, on average, over the last three months.
“The board has therefore concluded that the commercial disadvantages and costs of maintaining a quotation on AIM at this time in the Company’s development outweigh the potential benefits and that it is therefore no longer in the Company’s or its Shareholders’ best interests for its Ordinary Shares to remain quoted on AIM.”
Latest results for Optare showed that in the North Yorkshire-based firm, a subsidiary of Ashok Leyland, part of the Hinduja Group, was making a pretax loss of £4.06m for the year to 31 March 2014, an improvement of the year before, where the firm made a loss of £7.35m.
