Visioneering Technologies (ASX:VTI) has announced plans to delist from the Australian Securities Exchange (ASX), with a vote on the proposal scheduled for a special meeting of stockholders on 10 January 2025. The company’s board believes the delisting is in the best interests of the company and its securityholders, citing challenges related to liquidity, valuation, and administrative costs.
Visioneering Technologies is a US-based 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, which are designed to address myopia (nearsightedness) progression in children as well as presbyopia (age-related loss of ability to focus on near objects) in adults. Its products are sold in global markets, with a particular focus on the North American and Asia-Pacific regions.
The move to delist follows in-principle approval from the ASX, with the delisting set to occur no earlier than one month after shareholder approval is obtained. Trading in the company’s CHESS Depositary Interests (CDIs) will be suspended from 6 February 2025, with the final delisting expected on 10 February 2025.
**Reasons for the delisting**
The company’s reasons for the delisting included:
- Valuation issues: Visioneering’s board noted that the value of its CDIs has often diverged from company announcements, suggesting the market was not fairly valuing the business. This misalignment has made equity placements more dilutive for existing securityholders.
- Challenges with capital raising: Visioneering said its low market capitalisation 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 US$75,000 per month (US$900,000 annually) in costs associated with ASX compliance, including legal, accounting, and reporting expenses.
- Illiquidity and marketable parcels: As of 20 September 2024, 66.67% of its securityholders 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 believes that as an unlisted entity, the company will have greater flexibility to pursue mergers and acquisitions, as well as other strategic opportunities. The company has already engaged an M&A adviser and held preliminary discussions with potential acquirers.
- Impact on management and employees: The board argued that delisting would free up management’s time for other company priorities and enhance the company’s ability to attract and retain employees, given the perceived disconnect between the company’s value and its CDI price.
Consequences for securityholders
The delisting will change how securityholders can trade their holdings. Once the company is delisted, CDIs will no longer be quoted 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 share registrar, Computershare, detailing their converted shareholdings.
Without access to ASX trading, shareholders will only be able to trade their holdings via off-market private transactions, which can be more complex and less liquid. Securityholders are encouraged to sell their CDIs on the ASX before 6 February 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 company incorporated in Delaware, USA, it will remain subject to Delaware General Corporation Law.
To ensure transparency, the company has committed to continuing its practice of providing securityholders with annual accounts and periodic business updates.
Shares in Visioneering closed 57.78% lower at 5.7 cents yesterday.,