Lead-zinc exploration company, Europa Metals (EUZ) has submitted a formal application requesting removal from the official list of the Australian Securities Exchange (ASX).
The company also applied to move from the Main Board of the Johannesburg Stock Exchange (JSE) to the AltX, a securities exchange meant for companies that are “well established, but not yet ready to list on the JSE’s Main Board.”
Currently, Europa Metals securities are listed/quoted on three securities exchanges-- the Official list, AIM, and the JSE. Should these applications be successful, Europa Metals’ primary listing will be the AIM market.
Chief among a list of motivations for this shift is the “predominance of AIM listing,” as 83% if Europa Metals’ listed securities are traded on AIM. With only 10.7% of securities being traded via ASX, Europa Metals cited lack of Australian investor interest and low liquidity on the ASX as additional reasons to leave the exchange.
Efforts by the company to stir up and retain institutional and retail investors in Australia have not had the desired success; in fact, all of the company’s funds raised from capital markets over the past two years have been from UK investors.
In regards to the latter, the company has argued “the low trading volumes and liquidity of Europa Metal's ordinary shares on the Official List is such that any significant trading leads to increased volatility on the Official List. This volatility may prevent investors from making an accurate assessment of the actual value of the Company.”
Ultimately, the decision to no longer be listed on three separate exchanges is fueled by cost reduction. Maintaining all three listings, Europa maintains, added significant costs to the company, along with indirect costs such as the “need to devote management's time to attending to matters relating to the ASX listing which could be better directed elsewhere.”
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