Fuse 8 set to leave AIM over access to funding

The Leeds-based company recently announced the departure of its chief executive Nigel Hunter and issued a profits warning. It said this undermined investor confidence, “severely compromising” its fundraising plans on the Alternative Investment Market (AIM).

Yesterday it added profits for the year to the end of March will also miss its target.

Fuse 8 said it uncovered a number of unspecified issues after Mr Hunter failed to give the board a requested business update.

The company joined AIM in July 2010 through a reverse acquisition, aiming to tap markets for funds to grow.

“The directors believe that it means that the prospects of the company raising capital from institutional investors will be extremely difficult and/or not be possible at a valuation that is in the best interests of the company’s shareholders,” said Fuse 8 yesterday.

“Given the company’s relative newness to the AIM market, the directors believe that investor sentiment, and the solution of these two issues, will only increase following a number of years of good performance. During those years the company would incur the costs associated with being an AIM company but not be able to realise the principal benefit of being an AIM company.”

Its listing is thought to cost more than £110,000 annually.

Fellow Yorkshire AIM-listed firm Just Car Clinics recently announced plans to leave AIM, saying perceived benefits have largely failed to materialise.

Fuse 8 said it may have better access to capital as a private company, adding management time and the cost of its listing are “not a justifiable expense”.

The company said it will make a matched bargain dealing facility available to allow investors to trade shares. Investors holding 77.5 per cent of its shares have already backed the de-listing, making a vote next month a formality.

About 81 per cent of the company’s share capital is in private hands, with the bulk held between Mr Hunter, its founders Mark Walton and Andy Hutchinson, and a staff pension scheme.

Mr Hunter has 13.5 per cent of the company’s equity.

Fuse 8 is not thought to be taking legal action against Mr Hunter.