The majority shareholder of London Capital Group, GLIO Holdings, is proposing a delisting of the company from the London Stock Exchange. The news comes after multi-year declines in the broker’s value.
The company has been actively pursuing a restructuring since Charles Henri Sabet brought in a convertible loan investment from GLIO Holdings in 2014. After an initial investment of £17.5 million, the investor swapped its debt for equity and ended up with a controlling stake.
The announcement made by LCG via the London Stock Exchange’s Regulatory News Service (RNS) network outlines that, following discussions with representatives of GLIO Holdings, the firm decided to seek shareholder approval for the delisting of the brokerage from the LSE AIM market.
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Cost Reduction and Listing on NEX Growth Market
The rationale behind the move is cost reduction. Apparently, according to the board, the benefits of being listed on the LSE’s AIM market are not outweighing the costs of maintaining trading in the company’s ordinary shares on AIM. The limited liquidity in the shares of LCG is cited as an additional concern.
The admission of LCG to the NEX Growth Market laid the groundwork for the delisting of the firm from the LSE.
“GLIO Holdings have concluded that NEX would be a more appropriate market for the Company’s shares to be traded on,” the official statement outlines.
In the coming weeks, a general meeting notice will be sent to the shareholders of the company. One of the resolutions that are being proposed for a vote includes the cancellation of trading in the LCG’s ordinary shares on AIM. The vote requires a 75 percent majority. Currently, GLIO Holdings owns 78.14 percent of the company’s issued share capital.
Since GLIO Holdings is proposing the delisting, the delisting of the firm from the LSE’s AIM market is a virtual certainty.