(Alliance News) - Shares plunged in Avanti Communications Group PLC on Tuesday as it proposed to cancel its shares from London's AIM market.
Shares in the satellite data communications provider were 30% lower at 0.85 pence on Tuesday, reflecting a market capitalisation of GBP18.4 million.
Avanti said the proposed delisting is due partly to a consortium of shareholders holdings around 85% of the company's issued share capital, resulting in limited free float and liquidity. Avanti said that in the past 12 months, only 112 million shares have traded, representing 5% of shares issued overall.
In addition, Avanti's poor share price performance over the past 12 months had led to a market capitalisation of GBP26 million at the close on Monday, which the company's directors believe no longer reflects Avanti's value.
Avanti also pointed towards the "significant management time, legal and regulatory obligations", as well as costs that come with being listed on AIM. Cancelling its shares, the company said, would reduce its recurring administrative expenses by USD500,000 per annum.
Avanti will hold a general meeting on September 5, at which the proposal must receive at least 75% in approval from shareholders to proceed.
So far, Avanti has received irrevocable undertakings to support it in respect of 1.35 billion shares, representing, in aggregate, around 62% of Avanti's issued share capital.
Should the proposal be accepted, Avanti expects its shares to be cancelled on September 18.