LONDON (Alliance News) - Leed Resources PLC saw its shares plummet on Wednesday after admitting the company is unlikely to make a reverse takeover in time to avoid its shares being suspended under AIM rules, but said it is confident it can avoid having its shares cancelled.
Leed shares were down 42% to 0.0211 pence per share on Wednesday morning.
The investment company has until Friday to make an acquisition that would constitute as a reverse takeover to avoid its shares being suspended.
Under AIM rules, an investment company must implement its investing policy within 12 months from the policy being approved by shareholders, and although Leed Resources has made investments, none of them satisfy this requirement.
The company has existing investments totalling AUD1.68 million by way of loan notes in Battalion International Ltd, but Leed Resources said it is "unlikely that the company will have completed an acquisition or acquisitions which constitute a reverse takeover [...] by February 12, 2016."
If, as expected, Leed Resources fails to conduct a reverse takeover, its shares will be suspended. However, the company is confident it can avoid having its shares cancelled, which would happen six months after they are suspended if Leed Resources fails to conduct a reverse takeover.
"However, the Directors are reasonably confident that the company will be able to make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14 or otherwise implement the investing policy within six months from the date of suspension and before the company?s shares are cancelled from trading on AIM," said the company.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.