13th Feb 2020 14:25
(Alliance News) - MXC Capital Ltd on Thursday said it will seek shareholder approval to cancel its shares from AIM trading in a bid to save costs and because its stock has "traded at a notable discount" to its net asset value.
The technology-focused investor said it could save GBP300,000 a year if it cancelled its listing. The number includes fees paid to Peter Rigg and Simon Freer, two directors who will step down should the cancellation become effective.
MXC Capital said: "The cost and management time, together with the legal and regulatory burden associated with maintaining the company's admission to trading on AIM are, in the board's opinion, disproportionate to the benefits to the company and therefore to shareholders."
At the end of the 12 months to August 31, MXC Capital shares were trading at a 22% discount to its net asset value. In financial 2018, its shares ended at a 33% discount and at the end of financial 2017, a 27% discount.
The stock was 18% lower at 55.55 pence each in London on Thursday afternoon, a 53% discount to its 117p NAV at August 31.
MXC Capital added: "For several years, the company's ordinary shares have generally traded at a notable discount to the company's NAV. In addition, there is limited on-market trading activity or liquidity in the company's ordinary shares. Shareholders therefore currently have no way of exiting MXC other than by way of a sale of ordinary shares at a significant discount to the NAV per share."
The cancellation needs the backing of 75% of shareholders, at a general meeting scheduled on March 2. MXC said 67% of shareholders have committed to backing a cancellation.
"In the event that shareholders approve the cancellation, it is anticipated that the last day of dealings in the company's ordinary shares on AIM will be March 13 and that the effective date of the cancellation will be March 16," MXC added.
By Eric Cunha; [email protected]
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