This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Problem companies – Hibu, Vicorp and Avia Health Informatics

News today on three companies in financial difficulties. Hibu (formerly Yell) have announced that they have received a requisition for a general meeting of the company, which they apparently intend to convene. They reiterate that shareholders will get nothing from their proposed restructuring where the debt holders will gain overall control and state that the board “is unanimously of the opinion that the proposed resolutions are not in the best interests of Hibu and its subsidiaries nor its key stakeholders including its 12,000 employees, customers, suppliers and creditors”. They don’t mention the interests of shareholders though. Aren’t they stakeholders?

The requisition makes interesting reading and can be found here: www.hibu-shareholders-group.com/egm-request.html . There are 37 resolutions in all which is certainly a very large number. A lot of them are requesting information and the answers certainly might be of interest to shareholders. Shareholders have surely nothing to lose from voting in favour of these resolutions.

Vicorp was an AIM company which delisted in 2009. It specialises in voice recognition products and had revenue of £875k last year and profits of £276k, but the forecast this year is a loss of £81k after losses of contracts. Indeed times are so tough that they have had to sell the company car. Shareholders who subscribed prior to 2009 have seen their financial interest dwindle after past refinancings, but now they should probably consider it a write-off because the company is proposing to sell the business to the current CEO for £1 and then wind it up. If approved the company will buy all the shares offered for £1 (that’s not per share, that’s all the shares – just as a way to expedite holders claims for tax losses rather than await the liquidation). The major concern is that there seems to have been no attempt to look for other possible buyers for the business, which would not appear to be totally valueless. Shareholders should vote against the proposed disposal. Or consider making a bid of more than £1!

Avia Health Informatics. This was another financially troubled AIM company which looked like it was going bust as it never seemed to develop a viable business. It’s had its shares suspended more than once in the past but them decided to dispose of the operating business and become an investment company, with more fund raising which will dilute shareholders. Today the suspension was lifted and the share price immediately fell by over 60%. But at least shareholders will not be totally wiped out as is likely in the above two cases.

Roger Lawson

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