If you thought that today's market volatility was tough, spare a thought for owners of AVZ Minerals Ltd (ASX: AVZ) shares.
This lithium developer's shares have been suspended from trade for what seems to be an eternity due to an ownership dispute over its Manono Lithium Project in the Democratic Republic of the Congo (DRC).
In fact, next week on 11 May, it will be the second anniversary of its suspension.
That's two years that shareholders have not been able to touch the money they invested in the company.
And there sure is a lot of wealth tied up with AVZ shares. The company had a lofty market valuation of $2.8 billion in its final session before it was suspended.
To put that into context, that's greater than the current market capitalisations of Perpetual Ltd (ASX: PPT) and Nine Entertainment Co Holdings Ltd (ASX: NEC).
Unfortunately for those shareholders, it goes from bad to worse for them.
Image source: Getty Images
Goodbye AVZ Minerals shares
The Australian share market operator understandably doesn't appreciate lengthy suspensions. The share market is supposed to be liquid, after all.
So, its rules state that a company's shares will be delisted if they remain suspended for two years.
As a result, AVZ shares will be kicked off the ASX boards forever when that second anniversary is reached next week.
The lithium developer revealed that it will not fight the delisting and appeared to welcome it.
Why it won't fight the delisting
The company believes that delisting is actually in the best interests of its long-suffering shareholders. It said:
After careful consideration, the AVZ board has resolved not to seek reinstatement on the basis a reinstatement at this time would not be in the best interests of AVZ shareholders.
This is based on the following reasons:
The DRC Government's failure to comply with the interim orders made in the Company's favour by the International Center for Settlement of Investment Disputes (ICSID) tribunal on 16 January 2024.
Cominiere's failure to comply with the emergency orders made against it including the grant of emergency orders in the Company's favour by the International Court of Arbitration of the International Chamber of Commerce (ICC) tribunal on 5 May 2023 and on 15 November 2023 in ICC Case 27720.
The other key disputes to which the Company or a member of its corporate group is a party are ongoing; and operating as a listed entity gives rise to inherent complications for the Company as it seeks to advance its strategy for the resolution of the key disputes and the advancement of the development of the Manono Project.
What does this mean for its shares?
Once it is delisted AVZ Minerals will be an unlisted disclosing entity and will still be required to fulfil all the obligations of the Corporations Act. This includes continuous disclosure obligations. Those announcements will just be made via its website.
As for AVZ shares, they will still exist post-delisting. However, buying and selling them becomes more complex and will need to be undertaken by an off-market transfer via Automic.
In the meantime, AVZ will continue to seek a resolution to the disputes surrounding the Manono Project with the relevant stakeholders. It will also continue to defend its rights through international arbitration in the ICC and ICSID.
Overall, this demonstrates the dangers of investing in companies operating in countries that feature high on the corruption index.
