11th Jul 2014 09:09
LONDON (Alliance News) - Agriculture and horticulture company Camellia Friday said it is proposing to move its listing from the London Stock Exchange's main market to its junior AIM market, a move it thinks will offer shareholders tax benefits, put it on a market more appropriate for its size, cut listing costs, and potentially reduce some of the volatility in its shares caused by tracker funds moving in and out of the shares.
The company currently has a market capitalisation of GBP294.1 million, which would put it among the top 30 biggest stocks in the AIM All-Share index after it moves and is included in the index. It could therefore be included in the FTSE AIM UK 50 index.
In its statement, it said the move should mean its shares are 'relevant business property' for the purposes of UK inheritance tax business property relief. That would mean that shareholders who have held shares for two years may be eligible for UK inheritance tax business property relief, "although based on the current nature of the group and its assets, it is not considered that full relief at 100% would be available," it said.
Under rule changes introduced by the UK government earlier in the year, AIM-listed shares can now be held in tax-free Individual Savings Accounts, in the same way that stocks listed on the main market can be, meaning shareholders won't lose out on this benefit.
"The company's share price has experienced a level of volatility over the last few years by virtue of moving into, out of and then back into the FTSE All Share Index. This is driven in part by automated share trading of Index Tracker Funds and similar investment products. Following admission (to AIM), the company will no longer be eligible for inclusion in the FTSE All Share Index which will reduce some of the associated share price volatility that this has generated," Camellia added.
"Subject to admission, the company will be one of the largest companies on AIM and is anticipated to be eligible for inclusion in the FTSE AIM UK 50 Index, although the Index Tracker Funds for the FTSE AIM UK 50 Index are much smaller and fewer in number and do not typically generate significant share price volatility," it added.
The company also said the move should mean it has more flexibility over future corporate transaction and allow it to agree and execute some transaction more quickly and at lower cost that the main market listing allows. It will also reduce its administrative and regulatory requirements.
Camellia will seek permission for the move from its shareholders at a general meeting on August 6.
Its shares were trading down 5.1% at 10,649.00 pence on the main market Friday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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