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The number of AIM flotations has dived — and the number of companies rushing to delist has soared.
A total of 290 companies dropped out of the London Stock Exchange's junior market in the year to the end of March, an increase of 33% on the year before.
City law firm Trowers & Hamlins and accountant UHY Hacker Young say there were 77 AIM delistings in the first quarter of 2009 against 45 in the same period in 2008. They have teamed up to produce the survey that shows the delistings are increasingly driven by “financial stress”, a reversal or failure of corporate strategy and the absence of a nominated adviser (nomad).
Many delistings are the direct result of the credit crunch and economic slowdown. But at least 70 companies had to drop out because their nomad had ceased to act. That compares with 24 the previous year.
AIM rules require companies to have a nomad looking after their affairs at all times.
