Kina Petroleum Corporation has submitted an application to delist from the Australian Securities Exchange (ASX).
This follows a delist from Papua New Guinea’s stock exchange (PNGX) and ASX, but subject to receiving approval from ASX to continue with the ASX delisting.
It added that the notice of meeting for the shareholders of the company would be convened to think about, and if thought fit, to work on the delisting with accompanying materials expected to be released to shareholders this Friday.
The firm said that the board of directors are leaning towards delisting because:
Small trading volumes having a disproportionate impact on the cost of shares – in the 18 months since relisting, the fully paid ordinary shares traded on only 36 days and the cost of the share decreased from US$1.80 (K6.22) to US$0.38 (K1.21) based on the trading of 232,710 shares. The low liquidity worked on the important volatility in the cost shares from limited trading with a disproportionate impact on the share price. The board believed that this occurrence came out with a share price not reflective of the true value of the company;
Inability to increase capital at costs reflective of underlying asset value. The board thought that with the shares listed on ASX and PNGX, the prospects of increasing funds on PNG and ASX foreign exchange at a cost commensurate with underlying value were poor and any future capital raising would have a very dilutionary impact on shareholders.
Investor interest and minimal liquidity is because of concentrated shareholdings.
