17th May 2024 12:41
(Alliance News) - Orchard Funding Group PLC on Friday said it believes continuing its admission on AIM is outweighed by various factors.
The Luton, England-based insurance premium finance company in April said it had reviewed its capital allocation policy and trading on AIM having engaged with its key institutional shareholders.
Orchard pointed to the fact its share price was trading at a material discount to net asset value.
The review considered returning capital to shareholders through a buyback or tender offer, as well as the benefits of remaining on AIM.
It determined that the benefits of maintaining AIM admission are outweighed by the legal an regulatory requirements, as well as the associated costs.
Furthermore, Orchard's inability to attract sufficient interest from investors and the low levels of liquidity were also noted.
Consequently, the board believes the best course of action is to cease dividend payments in the current financial year so that retained capital can be retained to make a tender offer to shareholders if appropriate.
Orchard shares were down 10% to 27.00 pence each in London on Friday afternoon.
By Elijah Dale, Alliance News reporter
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