AsianLogic on last Wednesday said that as a result of the company’s strategic review initiated earlier this year, the Company believes it is no longer in the best interests of the Company to retain its AIM quotation. The Company, keeping in view the above, has proposed to cancel its admission to the London Stock Market.
 
Shares in AsianLogic were first admitted to trading on AIM at the end of 2007 but have fallen by over 70% in the past 12 months, reaching a 52-week low of 8.00 pence per share on 13th March. The Company’s Board now believes that the rationale for remaining a publicly quoted company has been “significantly undermined” and that the greater shareholder value will be derived by operating the Company’s business off-market for the immediate future.

In reaching its conclusion, the Board took into account the low trading volumes in the Company’s shares in the year up to 26th May, which amounted to 170 trading days when no shares were traded on AIM, which is equivalent to 65% of the time.

The Board also noted that that Company has a tightly held register of shareholders and suffers from a lack of liquidity for its ordinary shares. The current share register shows that approximately 43% of the existing issued shares are held by six shareholders, excluding directors and senior management, resulting in a small free float and low trading volumes.

The Board said that it believes it is unlikely in the context of current market conditions that the Company will need to be able to raise money though a new share issue or issue new shares in connection with an acquisition.

It also considered that there is a limited investor appreciation of the Company’s business areas and an increasing difficulty in attracting and maintaining institutional investors, particularly in the current economic environment. In addition, the tangible costs associated with maintaining the AIM quotation is disproportionately high when compared to the benefits and the Directors’ consider that these funds could be better utilised in operating the business.

Accordingly, AsianLogic’s Board has proposed a tender offer to shareholders of 25.00 pence per share, an 11% premium on 27th May mid-market closing price of 22.50 pence.

Tom Hall, Executive Vice Chairman of AsianLogic, said of the de-listing decision. “The Board has unanimously decided to recommend delisting to the shareholders as we feel that the current economic environment means there is little benefit to AsianLogic and its shareholders in remaining listed.

“The delisting will reduce costs and management time associated with a listing on AIM and will enable AsianLogic to focus its operations to better service our shareholders, business partners and customers alike.”

Under AIM rules, the delisting can only be effected by the company after the passing of a resolution approved by at least 75% of the votes cast by shareholders in a general meeting. AsianLogic said that assuming shareholders approve the resolution, the proposed delisting will take place by 3rd July 2009.

Written for OnlineBingoReviews.com by Joy

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