Asking to delist from the share market is rarely a good look for a company. After all, investors like to have the ability to buy and sell shares as they wish. And companies rarely request a delisting because they are enjoying rampant success. So let's look at one ASX mining share that has just asked permission to exit the ASX.
Ikwezi Mining Ltd (ASX: IKW) is a coal exploration company with interests across Africa. But Ikwezi Mining shares are not having a very pleasant day today. And, you guessed it, it seems to be because of the company's latest announcement.
This morning, Ikwezi put out an ASX release that declared the company has voluntarily applied to the ASX to be removed from share market listing, pending shareholder approval.
Ikwezi Mining shares to leave the ASX
This was reportedly for a number of reasons, including "low levels of trading and investor interest which
mean that the costs and administrative burden of remaining listed on ASX far outweigh any
benefits associated with remaining listed".
It also lists "no physical presence or Australian operations", a "negative thermal coal perception" and "speculative trading" as other reasons the board is choosing to go down this path.
Ikwezi is now warning investors that the negative consequences of delisting include more limited means to raise capital. Not to mention that Ikwezi shares will no longer be publically traded. As such:
Shareholders will only be able to sell their shares in off-market private transactions. Transactions of this kind will be subject to: (i) the applicable laws and regulations of Bermuda; and (ii) the Company's Constitution.
To facilitate any investors who want to sell their shares before Ikwezi is suspended from the ASX on or around 28 December, Ikwezi is undertaking an on-market share buyback program in order to increase liquidity. However, the maximum share price the company will pay under this buyback scheme will be 45.2 cents per share. This will be undertaken up to a maximum value of $918,650.
That might also help explain why the Ikwezi share price has tanked 21.85% today (at the time of writing) to 46 cents per share. Last Friday, the miner closed at 60 cents per share before the company was placed into a trading halt.
A shareholder meeting will now be held on 24 November to allow these proposals to be debated and approved. Then, Ikwezi's last official day on the ASX is scheduled for 29 December.
