BikeExchange (ASX: $BEX) raises funds for delisting application

BikeExchange Limited (ASX: $BEX) is raising up to $3.17 million through an accelerated non-renounceable entitlement offer and placement. The company is planning to use the funds to strengthen its balance sheet, provide working capital, progress technology platform development, fund unmarketable share buy-back, and cover delisting legal costs and capital raise costs. The proposed delisting from the ASX is subject to ASX approval and a special resolution of shareholders.

Executive Commentary

The proposed delisting from the ASX is a strategic opportunity to reduce costs and accelerate break-even. The company's shares are reasonably closely held, and the trading in the shares has been relatively illiquid. The board believes that the low trading volumes have had an adverse impact on the share price and is confident that the company's valuation has a greater prospect of growing towards the board's assessment of fair value as an unlisted company. Additionally, the board believes that the ongoing administrative, compliance, and direct costs associated with the company's ASX listing are disproportionate to the benefits of remaining listed. The proposed delisting is subject to ASX approval and the satisfaction of conditions that may be required by ASX, which will include a special resolution of shareholders.

Summary

BikeExchange Limited (ASX: $BEX) is raising funds through an entitlement offer and placement to support its application for delisting from the ASX. The company aims to reduce costs and accelerate break-even by delisting, citing reasons such as limited trading and liquidity, adverse impact on share price, risk of highly dilutive capital raising, disproportionate administrative costs, and management time and effort. The proposed delisting is subject to ASX approval and a special resolution of shareholders. The company plans to enable share sale pre-delisting and post-delisting for shareholders and expects to implement meaningful reductions in corporate overheads post-delisting. The company's financial performance and future growth will determine the ability to execute planned activities such as developing data services and platform services. The company also highlights various risks associated with the entitlement offer, delisting, and general business operations, including market competition, technological risks, and potential tax law changes.