Shares in Versarien, the U.K. advanced-materials group, took a hit following the company’s announcement that its ability to continue operating as a going concern could be jeopardized if the share-capital reorganization resolutions are not passed at the upcoming general meeting on Oct. 30.
As of 0837 GMT, the shares were down 0.34 pence or 36% at 0.60 pence.
In the event that the resolutions fail to gain approval, Versarien stated that it would be unable to secure equity funding, and if no alternative funding sources can be obtained, the company would face the possibility of discontinuation.
Under the proposed capital reorganization plan, each existing ordinary share of 1 pence will be subdivided and converted into one new ordinary share of 0.1 pence and one new deferred share of 0.9 pence.
While discussions surrounding the sale of certain assets are ongoing, Versarien acknowledged that there is no certainty regarding the completion of these sales before their existing working capital runs out. Consequently, the company may need additional funding from capital markets.
“The board believes that approving the resolutions is in the best interests of the company and its shareholders as a whole. Therefore, the board unanimously recommends that shareholders vote in favor of the resolutions, a decision that the directors themselves intend to follow in respect to their own beneficial holdings,” the company stated.