SMI Vantage has decided to hold an extraordinary general meeting (EGM) for the company to delist without making an exit offer.
According to the company in its Nov 1 statement, its board thought an EGM would be in the “best interests” of the company and its minority shareholders. It would also allow SMI Vantage to share its thought process on the matter in a transparent way.
The EGM is the last of four options, which include the possibility of an exit offer from the company’s controlling shareholders or the company itself.
SMI Vantage’s two controlling shareholders have already indicated, in a Sept 23 announcement, that they will not be making an exit offer.
An exit offer from SMI Vantage is also unlikely as the company is in a net current liability position of approximately US$937,000 ($1.24 million) as at June 30. At the same time, it holds US$105,000 on cash on hand at the company level, of which US$34,000 is held in Myanmar. The company is also in a net asset position of around US$7.0 million. The cash on hand is used by the group to meet its monthly operating expenses, explained SMI Vantage.
“The immediate impact from the delisting notice was that the company’s earlier financing plans which would have helped to alleviate the company’s net current liability position, are no longer available as these were contingent on the company being listed,” it added.
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To this end, SMI Vantage says it would cancel its earlier plans including the acquiring of new digital mining machines and sites, the development of its Robochef business in London, the increase in the size of the Provino and the acquisition of shares in the Whisky Cask Club.
In addition, one of the company’s controlling shareholders, Mark Bedingham, said he would “continue to provide financial support” to SMI Vantage to meet its financial obligations as they arise.
Both controlling shareholders have also reiterated their commitment in SMI Vantage’s annual report that they would not recall their respective shareholders loans, which stand at approximately US$10.6 million as at June 30.
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As of Nov 1, the company says it has started to implement restructuring steps to streamline its operations and lower costs across the various business units and the company itself. This is expected to lower the company’s overheads to US$0.4 million from US$2 million.
Some of the company’s existing business operations have not been directly affected by the delisting notice, it adds.
“The Myanmar business, a consumer facing business, and our local business partners continue to operate on daily basis and generate sales. However, the travel retail sales at the airport continue at levels which are 60% - 70% below pre-Covid reflecting much reduced business travel and the lack of tourism which itself is a reflection of the political uncertainty in that country,” says SMI Vantage.
“The cryptocurrency business has been operating at a virtual breakeven cashflow position owing to bitcoin currently trading below industry forecasts. The company is keeping a close watch over the operating conditions of the Robochef business and stands ready to close it down if necessary to stem its financial strain on the company,” it adds. “Earlier plans to assist Provino to expand are also no long achievable due to the current shortage of new funding. Instead, the company has entered into discussion with the former major shareholder, and still significant shareholder and operating manager, to unwind the acquisition of Provino.”
