11th Jun 2014 10:16
LONDON (Alliance News) - AIM-listed Quindell PLC Wednesday said it won't be able to move to the London Stock Exchange's main market for the time being because it hasn't been able to satisfy some of the rules of a premium listing on that market.
In a statement, the provider of software and consultancy services to the insurance and telecoms sectors said its advisers had been told that Quindell particularly didn't meet the rule that says a company may not be able to list if it has gone through a significant change in its scale or operations in the previous three years.
It said it will continue seeking a premium listing on the main market in London as soon as it can, but will also continue looking at other options, including listing in North America.
"Firstly, I would like to take this opportunity to apologise to shareholders, who will no doubt be as disappointed as the board are at hearing this news," said founder and Chairman Rob Terry, who blamed the success of the company for its failure to be able to move.
"Regrettably it is Quindell's success and change of scale of its operations during the last three years that is a core reason for the group not being deemed to be eligible for a premium listing at this time," Terry said.
Quindell is currently the seventh-biggest stock on AIM by market capitalisation, but its shares have tumbled over the last few weeks.
It fell sharply April 22 after Gotham City Research LLC said it was unable to reconcile between 42% and 80% of Quindell's profits, and alleged that it suspected they were explained by sales to related parties owned and operated by Terry. Gotham City also noted the company came into being through a reverse takeover in 2011.
Quindell said in April that it rejected Gotham City Research's assertions and called the note highly defamatory and deliberately misrepresentative. It said it was taking legal action, and had reported Gotham City to regulators after saying Gotham took short positions on Quindell's shares before publishing the report.
It isn't clear who is behind Gotham City Research, which publishes reports on its website and also has a Twitter feed. On its website, Gotham City says it focuses on due diligence-based, special situation investing and may have long or short equity positions in the companies it covers.
In Quindell's statement Wednesday, Terry said the company's outsourcing services division continues to grow and perform "extremely well", and it is on track with improving operating cash flow at the unit.
"The long term growth potential of telematics for the Group's Solutions Division continues to exceed our expectations with a significant number of new clients now live and the percentage of consumers opting for a telematics solution, when available, in North America significantly exceeding our previous guidance," he added.
However, Quindell's failure to meet premium listing rules for the main market weighed on its share price, and the stock was the biggest decliner on AIM Thursday morning, down 26.6% at 12.85 pence.
By Steve McGrath; [email protected]; @SteveMcGrath1
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