Corporation wants to delist from stock markets

The National Business

KINA Petroleum Corporation has formally submitted an application for it to be delisted from the Australian Securities Exchange (ASX).
The company announced to the market last week that it also proposed to delist from Papua New Guinea’s stock exchange (PNGX) at the same time as it delisted from ASX, subject to receiving approval from ASX to proceed with the ASX delisting.
It said the notice of meeting of the company’s shareholders would be convened to consider, and if thought fit, to approve the delisting with accompanying materials expected to be released to shareholders on Friday.
The company said its board of directors considered the delisting to be in the best interest of it and the shareholders because:

  • Small trading volumes having disproportionate effect on share price – in the 18 months since relisting, the fully paid ordinary shares in the capital of the company (shares) traded on only 36 days and the share price declined from US$1.80 (K6.22) to US$0.38 (K1.21) based on the trading of 232,710 shares, or less than two per cent of its total float.
    The low liquidity created significant volatility in the share price from limited trading with a disproportionate impact on the share price.
    The board believed that this phenomenon resulted in a share price that was not reflective of the true value of the company;
  • Inability to raise capital at prices reflective of underlying asset value.
    The board considered that, while the shares remained listed on ASX and PNGX and trading at a significant discount to that of comparable companies with high price volatility, the prospects of raising funds on ASX or PNG foreign exchange at a price commensurate with underlying value were poor and any future capital raising at current market prices would have a very significant dilutionary impact on shareholders; and,
  • Minimal liquidity and investor interest due to highly concentrated shareholdings.

The company’s share register is highly concentrated.
At present, approximately 86 per cent of the shares are held by the top.