Is Funding Drying Up for British Plc’s? Maybe Not, According to AIM Market Activity
Recent developments in the AIM junior market suggest that funding prospects for British PLCs might not be as bleak as initially thought.
Take Rosslyn Data Technologies PLC (AIM: RDT), for instance. This company recently initiated an equity round, raising £3.3 million through a combination of share placements and convertible loan notes. Notably, the shares were priced at 0.5p each, maintaining parity with the previous day’s closing price.
Following this funding announcement, Rosslyn’s AIM-listed shares experienced a 20% surge from 0.45p to 0.54p, although they later settled around 0.51p. Similarly, ImmuPharma PLC (AIM: IMM, OTC: IMMPF) sought market support by securing £1.35 million through an equity round. The offering price of 2p per share represented a discount of 16.7% compared to the market closing price.
While some might view these moves as necessary to sustain operations, others acknowledge the nuances of fundraising in 2023. Notably, ImmuPharma’s discount wasn’t the steepest in recent months; Aptamer, another biotech company, had accepted a 79% discount in July.
In contrast, the outlook for certain companies has been less favourable. Solar-tech micro-cap firm Verditek PLC (AIM: VDTK) witnessed a 27% drop in its share price after revealing plans to raise £500,000 at 0.45p per share, a 40% discount from the previous day’s closing price.
Investors have evidently shown varying levels of tolerance for fundraising discounts. On the flip side, premium-driven deals have also emerged. Instem PLC (AIM: INS) accepted a £203 million takeover proposal from healthcare-focused private equity group Archimed, entailing a cash offer of 833p per share.
This deal marked a 41% premium to the prior day’s close and a 34% premium to the average price over the last six months, leading to a 39% increase in Instem’s shares to 825p.
Comparatively, the AIM market’s performance lagged behind larger indices like the FTSE 100. Despite starting the week positively, AIM only managed a 0.7% gain, whereas the FTSE 100 recorded a 2% increase.
Several companies faced significant challenges. Ovoca Bio (AIM: OVB) saw its shares plummet over 80% due to disappointing study results. Pelatro PLC (AIM: PTRO) opted to delist from AIM, causing its shares to drop by 70%.
Sondrel (Holdings) plc, a chipmaking firm, encountered a 60% drop after disclosing delays in its ASIC designs. Totally plc also encountered issues, as its chairman expressed concerns about NHS contracts, leading to a 15% share price decline.
In summary, the AIM market has witnessed a mix of funding activities and market responses, with companies pursuing various strategies to navigate the evolving landscape.
