Tolent, the AIM listed construction group, is to hold a General Meeting on 8 February which will seek shareholder approval for the cancellation of its trading on AIM.
An explanatory circular setting out the details of the proposal has been posted to shareholders today.
The circular said: “The perceived benefits of an AIM listing usually include access to funding, enhanced corporate profile and liquidity in the company's shares. The Board has reached the view that the Company is not receiving these benefits to any extent that would justify the costs and management time associated with maintaining the listing.
“Furthermore, the requirements to provide trading updates under the AIM Rules are proving commercially disadvantageous in the current climate. The Board therefore believes that the Company's interests would be better served if the Company were to operate as an unlisted company without the requirements of an AIM listing.”
Tolent has been listed on AIM since its demerger from Amco Corporation Plc, now called Billington Holdings, in 1999. The firm has not sought to raise any money from the markets since joining AIM, and says it is unlikely to attempt to do so.
In its last full-year accounts, for the 12 months to 31 December 2008, Tolent made a pre-tax profit of £1.3m on a turnover of £154m.
The circular continued: “Private companies only have the requirement to produce accounts annually, which can help them to delay customers becoming aware of any deterioration in their performance, for example.
“However, Tolent is more transparent owing to its relatively small size and AIM listing with its requirement for regular trading updates and, in the current climate, where activity levels are low, it is not difficult for customers to identify the impact that their contract is having on the company's results and to use that to their commercial advantage.
“Volatility in the share price and the apparent discount or premium to the Group's net assets from time to time can also create a misleading view of the company. Tolent's management find that considerable effort is often required to address the perceptions created with customers and suppliers before they will deal with the company and the board considers that cancellation will remove this factor from discussions with customers and suppliers.”
It concluded: “The Board has therefore decided to propose the cancellation. The Directors' intention is that the company should remain a public but unlisted company.”