EIH mulls cancellation of AIM listing
By Josh White
Date: Thursday 21 Nov 2019
(Sharecast News) - EIH announced on Thursday that it has been advised by the investment manager of the Evolvence India Fund (EIF), that the fund's life has been extended to 31 October 2020, with the likelihood that further extensions would be required thereafter.
The AIM-traded firm said that during the extension period, the investment manager would not be charging management fees, although the fund would still be incurring expenses including administrative, legal, accounting and deal costs.
It said the unaudited fair value of EIF, as disclosed in EIH's interim results for the six months ended 30 June, was $9.4m.
The company also confirmed that the expected distribution of approximately $0.9m from EIF, as described in the interim results, had been received, and the company currently held $1.37m in net cash balances.
"In the context of the extension of EIF's life until 31 October 2020, however, the directors have reviewed certain underlying financial information provided to them by EIF's investment manager," the board said in its statement.
"The directors have concluded that, while they remain confident that further realisations from EIF's underling portfolio will be achieved, there is now a higher level of uncertainty as to both the value of the remaining assets to be realised and the timing of distributions to shareholders.
"Moreover, the investment manager has indicated that certain assets are the subject of negotiations for sale at a discount to the carrying value stated in our interim results as at 30 June."
EIH's directors said they intended to consult with key shareholders, with a view to seeking approval for the cancellation of the admission of the company's shares to trading on AIM.
They said they believed that there was a "clear lack of liquidity" in the shares, and that the costs associated with maintaining a listing on AIM were now disproportionate to the value provided by the listing.
The board said it expected savings arising from the cancellation to amount to at least £75,000 per annum.
EIH's board confirmed that, following cancellation, it would continue with its stated objective to realise assets at the appropriate time and value, and to return the proceeds, less expenses, to shareholders, while at the same time managing the company's operating costs carefully.
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