2nd Jul 2019 13:39
(Alliance News) - Boston International Holdings PLC on Tuesday said it will have incurred a "serious loss of capital" once it has paid transaction costs from its aborted acquisition of Cornhill FX Holdings Ltd.
Boston International is a special purpose acquisition company and was formed to acquire businesses in the foreign exchange sector, and announced plans for the reverse takeover of foreign exchange broker Cornhill FX in August 2017.
However, Boston International was forced to abandon its plan on Monday this week because it could not raise enough capital. As such, is has been carefully reviewing" its cash position as "certain aborted transaction costs" have now "crystallised and become due".
Once such costs are paid, the company will have incurred a serious loss of capital under the Companies Act 2006. This will mean that the net assets of Boston International will be "half or less than the company's called-up share capital".
As such, the company is required to hold a shareholder meeting "to consider what, if any, steps should be taken to deal with the situation".
"The board will now undertake a review to determine the most appropriate future strategy for [Boston International] and will update shareholders once this has been updated, including further details about any general meeting that needs to be convened for the purposes of section 656 of the 2006 act," the firm said.
"It should be noted that the status of a 'serious loss of capital' under section 656 of the 2006 act imposes no immediate risk to the company given the current solvency of its balance sheet and cash flow. The board will prudently manage the company's remaining cash reserves and minimise its operating expenses whilst it reviews the future strategy," Boston International added.
Shares in Boston International were untraded at 6.50 pence on Tuesday afternoon.
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