(Alliance News) - Verseon Corp on Wednesday said it intends to repurchase its shares and then cancel admission to London's junior AIM market.
The clinical-stage pharmaceutical firm said the share tender offer has an expected price of 1.56 pence per share. This news caused Verseon's share price to plummet 71% to 1.50p on Wednesday morning, having closed at 5.10p on Tuesday.
Directors and shareholders holding an approximately 65% stake between them are not expected to take up the offer.
According to Verseon, market events outside its control have hurt third parties and external shareholders, putting "extreme pressure" on its share price in 2019. As such, this has impeded its ability to raise funds, either though a preferred share offering or through the sale-leaseback of its facilities.
"As long as the market quote exists, the company's ability to raise sufficient funds and support ongoing operations will continue to be impaired, making the company's cash position increasingly acute and putting the equity value of the company at further risk," said Verseon.
Further, Verseon said its directors are of the belief that the company's viability as a going concern is at risk so long as it remains on AIM market and it would be better able to raise funds, including through a preferred share offering, as a private company.
The stock cancellation is subject to obtaining consent from at least 75% of the votes cast at a special shareholder meeting, which is scheduled for December 6. If approval is obtained, the final day of trading in Verseon's common shares will be December 18 and the cancellation will be effective from December 19.
Verseon separately announced it has entered into six-month debt facilities with investors to raise around USD1.2 million in order to fund the share tender offer.
By Anna Farley; annafarley@alliancenews.com
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