(Sharecast News) - RNAi medicines data and development specialist e-Therapeutics proposed a fundraise and its delisting from AIM on Wednesday.
The AIM-traded firm said it was planning to raise £28.9m through a subscription for 192,666,667 new shares at a price of 15p each.
It said the subscription would be led by funds managed by M&G Investment Management, and Richard Griffiths and his controlled undertakings, both existing shareholders of the company.
The move was aimed at fortifying the company's balance sheet, considering its current cash position of £18m.
e-Therapeutics also proposed the cancellation of the admission of its shares to trading on AIM - a decision which it said aligned with its broader strategy to explore listing on Nasdaq in the future.
Both the subscription and the cancellation were subject to shareholder approval, which would be sought at a general meeting scheduled for 29 April.
The company said it had already secured irrevocable undertakings from the subscribers, representing 46.68% of its existing shares, to vote in favour of the proposed resolutions.
Its directors had also expressed their intention to vote their entire holdings in favour of the resolutions, amounting to interests in 52,735,562 shares, or around 9% of its existing shares.
"We decided to remain on the AIM market and embarked on a capital raise roadshow in February to March," said chief executive officer Ali Mortazavi.
"Despite the firm commitments given by our two largest shareholders, the Board was extremely disappointed by the lack of institutional UK interest in our innovative, technology-driven value propositions.
"ETX struggled to get sufficient engagement from the vast majority of the institutions who were approached, reflecting the risk appetite of the UK markets."
Mortazavi said the board believed the current valuation did not reflect ETX's position as a "leading TechBio company".
He said the firm had powerful enabling technologies and a pipeline of differentiated RNAi assets, but added that there was a "limited audience" on AIM for such companies.
"We are of the firm belief that it is in the best interest of all shareholders to delist from the AIM market, with a strong cash position of approximately £47 million following this fundraise.
"We have also stated our willingness to explore relisting the company in the future on the US Nasdaq exchange where the large gap in the valuation of ETX compared to its US peers can hopefully be narrowed."
At 1243 BST, shares in e-Therapeutics were down 8% at 11.5p.
Reporting by Josh White for Sharecast.com.
E-therapeutics (ETX)