Geneva proposes delisting
Geneva Finance has announced plans to delist from the NZX main board and instead join the Unlisted Securities Exchange (USX), subject to shareholder approval.
The company will hold a special meeting of shareholders at Waipuna Hotel & Conference Centre, Mt Wellington, Auckland, on Friday, July 5, to consider resolutions to approve the changes.
Geneva’s board has cited four main reasons for the action, which it believes is in the best interest of Geneva Finance shareholders. These are:
• Infrequent trading and low liquidity: “The company’s shares experience infrequent trading at very low volumes. We believe that this lack of liquidity means that maintaining our listing on the NZX main board offers little advantage to shareholders.”
• Reducing compliance and governance costs: “If Geneva Finance delists from the NZX main board, the company will no longer be subject to the compliance and governance obligations contained within the NZX listing rules and will instead comply with the USX market rules. This is expected to give rise to lower compliance and governance costs for the company.”
• More time to focus on core business activities: “Compliance with the ongoing obligations on NZX-listed issuers involves a significant investment of board and management time. Moving the company’s listing to the USX will enable the board and management to devote more time to core business activities.”
• USX will offer shareholders an alternative trading platform: “As delisting from the NZX main board is proposed to be undertaken in conjunction with listing on the USX, shareholders will still have a platform on which to trade their shares.”
Seeking approval
Geneva notes in an announcement on June 17 that the NZX has approved the company’s delisting providing it meets a number of conditions.
These include that the company obtains, by way of ordinary resolution, approval from shareholders who are ‘non-affiliated holders’ to delist from the NZX main board. Non-affiliated holders generally hold less than 10 per cent of shares, individually and with any associated persons.
NZX has also stipulated that Geneva must allow NZ RegCo to review, prior to publication, any delisting announcement and communication that the company sends its shareholders.
Geneva says if shareholders approve the resolutions, it expects a trading halt on shares to start at the close of business on July 15.
It indicates its shares would likely be delisted from the NZX main board on July 17 and share trading on the USX would commence the following day.
The company adds that delisting from the NZX main board means the company will cease to be bound by NZX listing rules, including the continuous and periodic disclosure rules.
“If the delisting is approved, the company intends to release quarterly financial information to shareholders through the USX announcement platform,” it continues.
The board has recommended shareholders support Geneva shifting to the USX and state the company will continue to be domiciled in New Zealand
“If the resolutions are not passed, the company will continue to be listed on the NZX main board,” say the company’s directors in a notice of meeting.
“In Geneva Finance’s view, continuing as a listed company on the NZX main board would mean bearing disproportionate costs relative to the benefits.
“Remaining listed on the NZX main board requires dedicated resources in areas that do not generate economic benefits for Geneva Finance and limits the company’s ability to reduce costs.”
