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- US-based eCommerce company Zebit (ZBT) has decided to delist from the ASX
- After experiencing low levels of trading liquidity, ZBT says the costs and administrative burden of remaining listed outweigh any benefits that come with remaining listed
- According to Zebit, delisting will save it roughly US$140,000 (A$196,120) per month over the next 12 months which would assist with funding current operations and future growth
- Before it can be removed from the ASX Official List, security holders will need to approve at a meeting expected to be held in mid-March
- Shares opened Friday’s session at 15 cents and have since plummeted 58.5 per cent to 8.1 cents
Shares in eCommerce company Zebit (ZBT) plummeted this morning as it announced its decision to delist from the Australian Securities Exchange (ASX).
Based in the US, Zebit is focused on ‘reinventing’ online shopping for over 100 million US consumers who don’t qualify for mainstream credit. Zebit’s buy now, pay later marketplace includes thousands of brands that allows users to purchase from and pay for in instalments over six months.
The company formally applied to be removed from the official list of the ASX, which it said is “in the best interests of the company for a number of reasons”.
Zebit detailed five key reasons which include liquidity, costs, capital requirements, valuation, and management time and effort.
The company’s low liquidity levels have led to limited trading opportunities for security holders wanting to exit their positions and for new ones to acquire CHESS Depositary Interests (CDIs). Zebit doesn’t expect that trading levels will improve in the foreseeable future.
Zebit also described cost requirements to be a ‘burden’ of remaining listed on the ASX and that they outweigh any benefits associated with remaining listed. The company expects that delisting will save it roughly US$140,000 (A$196,120) per month over the next 12 months.
It anticipates needing further capital during the current financial year to fund operations and future growth but due to its limited liquidity, CDI price and market feedback, Zebit doubts it’d be able to raise the money from Australian investors.
Since its IPO, the company has questioned whether it’s fairly valued on the market and the board believes that delisting would allow a ‘more objective and independent appraisal of valuation to take place’, without concern for any illiquid public market.
Additionally, management is spending a significant amount of time on ASX matters and said delisting would give it more time to spend on “other matters for the benefit of the company”.
Before it can officially delist, security holders will need to give their approval and the notice of meeting seeking security holder approval for ZBT’s removal from the Official List must include a statement that’s satisfactory to the ASX.
The meeting to approve the delisting is expected to be held on March 16 and results will be announced immediately after. If Zebit’s removal from the Official List is approved, the company expects to delist on April 22, 2022.
A consequence of delisting means shares in the company will only be able to be sold in off-market private transactions.
Shares opened Friday’s session at 15 cents and have since plummeted 58.5 per cent to 8.1 cents at midday trade.
