Vision technologies (ASX:VTI) announced its intention to delist from the Australian Securities Exchange (ASX), with a vote on the proposal planned at a special meeting of shareholders on January 10, 2025. The company’s board believes that delisting is in the best interest of the company and its shareholders, citing challenges related to liquidity, valuation and administrative costs.
Visioneering Technologies is an American medical device company that develops and sells innovative contact lenses and vision correction products. The company is known for its proprietary NaturalVue Multifocal contact lenses, designed to combat the progression of myopia (nearsightedness) in children as well as presbyopia (age-related loss of ability to focus on nearby objects). in adults. Its products are sold in global markets, with a particular focus on the North America and Asia-Pacific regions.
The delisting decision follows approval in principle from the ASX, with delisting expected to occur no earlier than one month after shareholder approval is obtained. Trading in the company’s CHESS Depositary Interests (CDI) will be suspended from February 6, 2025, with final delisting expected on February 10, 2025.
**Reasons for deregistration**
The reasons given by the company for the delisting were as follows:
- Valuation Issues: Visioneering’s board noted that the value of its CDIs often deviated from the company’s announcements, suggesting that the market was not fairly valuing the company. This misalignment has made equity investments more dilutive to existing security holders.
- Challenges in Raising Capital: Visioneering said its low market capitalization and limited liquidity have made it difficult to raise capital or attract institutional investors. It plans to raise capital before the delisting, but anticipates that future fundraising as an unlisted entity will be less dilutive.
- High administrative costs: The company estimates it will save at least $75,000 per month ($900,000 per year) in costs associated with ASX compliance, including legal, accounting and reporting costs.
- Illiquidity and Marketable Parcels: As of September 20, 2024, 66.67% of its security holders held parcels worth $500 or less. This limited liquidity has reduced the company’s ability to engage in corporate transactions or strategic initiatives.
- Flexibility for Strategic Opportunities: Visioneering’s Board of Directors believes that as a private entity, the Company will have greater flexibility to pursue mergers and acquisitions, as well as other strategic opportunities. The company has already hired a mergers and acquisitions advisor and held preliminary discussions with potential buyers.
- Impact on Management and Employees: The Board of Directors argued that the delisting would free up management’s time for other company priorities and improve the company’s ability to attract and retain employees, given the perceived disconnect between the value of the company and the price of the CDI.
Consequences for security holders
The delisting will change the way security holders can trade their holdings. Once the company is delisted, the CDIs will no longer be listed or traded on the ASX. Instead, they will be converted into underlying shares of Visioneering Technologies. Shareholders will receive a statement of their holdings from the US registrar of shares, Computershare, detailing their converted holdings.
Without access to ASX trading, shareholders will only be able to trade their holdings through off-market private transactions, which can be more complex and less liquid. Security holders are encouraged to sell their CDIs on the ASX before February 6, 2025 if they wish to avoid this change.
Next steps
Once delisted, Visioneering will no longer be subject to the ASX listing rules or certain provisions of the Australian Corporations Act. It will also cease to be an “unlisted disclosing entity” under Australian law, meaning it will not have to comply with certain continuous disclosure obligations. However, as a corporation incorporated in Delaware, United States, it will remain subject to Delaware General Corporation Law.
To ensure transparency, the Company is committed to continuing its practice of providing security holders with annual accounts and periodic updates of its activities.
Visioneering shares closed 57.78% lower at 5.7 cents yesterday.
