4th Jul 2016 10:04
LONDON (Alliance News) - Origo Partners PLC Monday said its net asset value declined steeply in the last financial year as the company continues to address issues that could lead to the company's shares being cancelled from AIM in September this year.
Origo shares were down 9.1% to 0.250 pence per share on Monday morning.
Origo said its net asset value declined by 44% during 2015 to USD30.6 million at the end of the year from USD54.3 million at the end of 2014. At the mid-point of the year in June, the net asset value stood at USD50.7 million, implying the fall accelerated in the second half of the year.
The pretax loss, however, was significantly narrower in the year at USD24.8 million than the USD62.2 million loss the year before, driven by a severe reduction in the losses from its investments.
Realised losses on disposals amounted to USD1.5 million compared to USD14.5 million the year before whilst unrealised losses totalled USD14.4 million compared to USD30.1 million.
"2015 was another challenging year for Origo as we sought to deal with a number of interrelated issues that have impacted the company's financial position, the performance of our investment portfolio and our ability to execute our realisation strategy," said the company.
Origo is aiming to divest from its entire portfolio by November 2018 before possibly implementing a revised investment strategy. Origo said the recent restructuring of its governance and management arrangements has, in the meantime, lowered core operating costs to USD4.2 million per year from USD5.0 million, and said further reductions are expected in 2016.
However, the company could face having its shares cancelled from trading on AIM in September if it cannot resolve ongoing issues that spawned from an issue with Brooks Macdonald Group PLC concerning the company's convertible zero dividend preference (CZDP) shares.
Origo agreed restructuring proposals with Brooks MacDonald over the CZDPs, but shareholders did not provide the 75% support needed at a meeting in February 2016, meaning those proposals were binned.
That meant Origo could not redeem USD12.0 million worth of CZDPs which were due for redemption in March this year. Since then, Brooks MacDonald has issued a claim in the Isle of Man seeking a winding-up order against Origo on the grounds that it was "just and equitable to do so in view of the company's alleged oppressive conduct and unfairly prejudicial treatment of the Brooks Macdonald as a shareholder", it said.
Origo is fighting the claim as it believes its inability to redeem the CZDPs was not a breach of the company's articles of association. Although the issue is not materially affecting day-to-day operations, it is preventing Origo from disposing of its investments and implementing its proposed new investment strategy.
Origo, as a result, requested to have its shares suspended on March 11. Currently, a hearing concerning the winding-up claim is set for July 22 and July 25 - but a date for the trial has not been set.
The company said the trial is expected "no earlier than September 2016" - threatening the company's London listing.
Origo will have it shares suspended on September 11 if its shares remain suspended, but the company said it will be "vigorously contesting" the winding-up claim.
"The board believes it is an abuse of process being brought for collateral, improper and self-serving purposes. However, the company's opposition to the winding-up claim will inevitably involve significant cost," said Origo.
"In the year ahead, the board will continue to work towards a resolution of the ongoing dispute with Brooks Macdonald in the interests of all shareholders," the company added.
By Joshua Warner; [email protected]; @JoshAlliance
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