Specialist Investment Properties (SIPP) has announced that it intends to seek shareholder approval for the cancellation of admission of its Ordinary Shares to trading on AIM.

Background to the Cancellation:

The Company announced its final results for the year ended 31 December 2016 on 26 May 2017 and has published its results for the six months ended 30 June 2017 today. In the results for the year ended 31 December 2016 the Company disclosed that SIPP had some months ago sought to raise additional equity capital as it had used the majority of its available capital in making acquisitions in its three identified target asset classes of children's homes, supported living accommodation and short term accommodation for local authorities. The equity fundraising did not proceed because the current size of the Company and the extent of its investment pipeline limited the market capitalisation of the Company post fund-raising, which diminished the attractiveness for institutional investors (who were generally positive about the investment strategy but were looking for a larger market capitalisation).

Accordingly, the Company announced in the same results that it was considering the best option to realise value in the Group which might include seeking shareholder approval for the cancellation of the Company's Ordinary Shares from trading on AIM in order to preserve shareholder value and/or a sale of the Group's assets. Following careful consideration, the Board has now concluded that it is in the best interests of the Company and its shareholders to seek the Cancellation and once effected seek to dispose of the Company's assets and subsequently pursue an orderly winding up of the Company.

Reason for the Cancellation:

The Board has concluded that, given the difficulties in raising equity funds described above, the Company will not be able to reach critical mass to fully execute its strategy and that, while its assets are performing well and the Group is generating a small operating profit, its current size means that the fixed costs of running the Company, including the costs of being admitted to trading on AIM, are disproportionate to the amount of income the Company generates from its assets. The Company's current administration costs are running in excess of £150,000 and following delisting would be expected to be reduced by at least 50%.

Following careful consideration, the Directors have therefore concluded that it is no longer in the best interests of the Company or its Shareholders to maintain the Company's admission to trading on AIM. Consequently, the Board has decided to propose the Cancellation. The Directors' intention is to reduce the Company's costs through the Cancellation and following which they will seek to dispose of the Company's assets to realise as much value as possible for Shareholders. As well as reducing the Company's costs, the Board believes that not being a Company admitted to trading on AIM will provide it with greater flexibility to realise the best value for its assets. Any sale of assets after the Cancellation comes into effect which is to an entity/person which is in any way a related party (as defined in the AIM Rules and/or under IOM Law) will be made only after obtaining an independent valuation and the approval of the independent directors.



At 2:09pm: (LON:SIPP) Specialist Investment Properties Plc share price was +1.75p at 15p