Struggling Teesside firm Applied Graphene Materials could be sold to a Canadian graphene company before its shell company is delisted from AIM.
The loss-making business, which specialises in graphene products used in coatings and composite, revealed the proposal to shareholders who are likely to lose out as a result of the move. It follows a "strategic review" of the firm announced in November alongside the start of redundancy consultations for Applied Graphene's 30 staff at its Redcar base.
Ontario-based graphene commercialisation specialist Universal Matter Inc will buy Applied Graphene's main trading entity for £1.07m (US$1.3m), some of which will be used to repay creditors, staff, advisors and the company's operating costs before the plc is wound down. Applied Graphene has previously warned it would run out of cash by the end of February and in the latest update said it was "very unlikely" to be able to return funds to shareholders.
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The proposed deal requires Government rubber-stamping and shareholders' approval at a general meeting. If that fails, Applied Graphene will be forced to call in administrators - a move the firm says would incur further costs.
Trading in shares of the company has been suspended since February 1 owing to Applied Graphene missing the deadline for reporting its results under AIM rules. Now directors say there will be no annual report and accounts for Applied Graphene for its 2022 financial year, however shareholders were told the group had recorded an unaudited pre-tax loss of £3.86m on unaudited turnover of £91,000 in the year to the end of July 2022.
As part of the announcement to shareholders, Applied Graphene gave a short update on current trading in which it said: "Post year-end trading has been encouraging, however, at this juncture the company has insufficient liquidity to pursue its growth strategy. The board is therefore of the view that it is in shareholders' and creditors' best interests to sell the trading operations and wind-up the company."
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