Visionary technologies (ASX:VTI) has announced plans to delist the Australian Securities Exchange (ASX), with a vote on the proposal expected at a special meeting of shareholders on 10 January 2025. The company’s board of directors believes the delisting is in the best interests of the company and its shareholders, citing challenges related to liquidity, valuation and administrative costs.
Visioneering Technologies is a US-based medical device company that develops and sells innovative contact lenses and vision correction products. The company is known for its proprietary NaturalVue Multifocal contact lenses, designed to address the progression of nearsightedness (myopia) in children and presbyopia (age-related loss of the ability to focus on nearby objects) in adults. Its products are sold in global markets, with a focus on the North America and Asia-Pacific regions.
The move to delist follows approval in principle from the ASX, with delisting expected no earlier than one month after shareholder approval is obtained. Trading of the company’s CHESS Deposit Interest (CDI) will be suspended from February 6, 2025, with final cancellation scheduled for February 10, 2025.
**Reasons for cancellation**
The reasons for the company’s delisting included:
- Valuation Issues: Visioneering’s board noted that the value of its CDIs often deviated from the company’s announcements, suggesting that the market was not valuing the business fairly. This misalignment has made equity placements more dilutive for existing equity holders.
- Capital-raising challenges: Visioneering said its low market capitalization and limited liquidity made it difficult to raise capital or attract institutional investors. It plans to raise capital before delisting, but expects future fundraising as an unlisted entity to be less dilutive.
- High administrative costs: The company estimates it will save at least $75,000 per month ($900,000 per year) in costs associated with ASX compliance, including legal, accounting and reporting fees.
- Illiquidity and Marketable Parcels: As of September 20, 2024, 66.67% of security holders held parcels valued at $500 or less. This limited liquidity has reduced the company’s ability to engage in corporate actions or strategic initiatives.
- Flexibility for Strategic Opportunities: Visioneering’s board of directors believes that, as a non-publicly traded entity, the company will have greater flexibility to pursue mergers and acquisitions, as well as other strategic opportunities. The company has already engaged an M&A advisor and held preliminary discussions with potential buyers.
- Impact on management and employees: The board argued that delisting would free up management’s time for other business priorities and improve the company’s ability to attract and retain employees, given the perceived disconnect between company value and price of your CDI.
Consequences for security holders
The delisting will change the way security holders can trade their holdings. Once the company is delisted, CDIs will no longer be listed or traded on the ASX. They will instead be converted into underlying shares of Visioneering Technologies. Shareholders will receive a statement of their holdings from the US stock registry, Computershare, detailing their converted holdings.
Without access to ASX trading, shareholders will only be able to trade their holdings through private off-market transactions, which can be more complex and less liquid. Bondholders are encouraged to sell their CDIs on the ASX before 6 February 2025 if they wish to avoid this change.
Next steps
Once delisted, Visioneering will no longer be subject to the ASX listing rules or certain provisions of the Australian Corporations Act. Furthermore, it will cease to be an unlisted disclosing entity under Australian law, which means it will not have to comply certain continuous disclosure obligations. However, as a corporation incorporated in Delaware, United States, it will remain subject to the Delaware General Corporation Law.
To ensure transparency, the company has committed to continuing the practice of providing security holders with annual accounts and periodic company updates.
Visioneering shares closed 57.78% lower at 5.7 cents yesterday.