Capital Management board outlines plan to go private
Liquidity issues and a lack of movement were behind a plan to de-list and wind up Capital Management and Investment as the company looks to go private.
Capital Management & Investment
90.00p
16:50 25/01/16
Financial Services
13,858.08
17:09 24/04/24
The AIM-listed investment vehicle released the proposal for shareholder approval early in the day, ahead of a general meeting to be held in London on 12 January 2016.
It would need the approval of a t least 75% of the shareholder votes cast in person or by proxy at the meeting.
"(The board) intends to seek shareholder approval for the cancellation of the admission to trading of the company's ordinary shares on AIM, the adoption of new articles of association, the re-registration as a private limited company, and amendments of its investing policy", the firm said in a statement.
It explained that, as a result of a number of its investment transactions made since 2004, the company had more than 2,700 shareholders at 16 December, with the vast majority of them private shareholders.
More than 2,500 of them owned just 100 ordinary shares or fewer. In the year to 17 December, 172,267 shares were traded, which represented just 2.4% of the company's issued share capital.
Capital Management's share price on the same day was 90p, which represented a 32% discount to the company's net asset value as reported on 31 July.
"In addition the costs of maintaing the company's admission to trading on the AIM are estimated to be £0.25m annually, without taking into account the significant amount of additional board time taken up with publicly quoted company matters, including the production of interim and annual reports", the statement said.
"The perceived benefits of an AIM quotation typically include access to equity capital markets, an enhanced corporate profile, a means to incentivise staff and a mechanism to provide a market in the company's ordinary shares. The board has reached the view that the company does not enjoy any of these benefits", it went on to say.
Capital Management's board planned to return £5.3m of its current cash to shareholders, sell its principal asset - a 2.8% holding in ASH - for around £3.2m, distribute the proceeds and any other surplus cash, and commence winding up proceedings.
At 0820 GMT, shares in Capital Management and Investment were down 2.78% to 87.5p.