SMALL CAPS ON THE MOVE: AIM shaken by three new exits

Chaarat Gold, Destiny Pharma and Sondrel led the AIM losers list this week after announcing their exit from the junior market.

They are joining an exodus of smaller companies, mainly in the technology and biotechnology sectors, frustrated by a funding drought and the waning popularity of growth stocks.

For anti-infective specialists Destination (down 49 per cent), chaired by City grandee Sir Nigel Rudd, the choice was clear: the company left AIM to avoid financial implosion.

Rudd told investors: “Short of taking this route, we believe liquidation of the company is the most likely alternative.”

Chip manufacturer Sondrel (down 38 per cent), which announced its potential exit in May, confirmed earlier this week that “the complexities of listing on AIM are not in the interests of any stakeholders at this stage of the group’s transition”.

A rescue financing that will leave current investors with just a 4 percent stake in Golden Charat (a 73 percent drop) will likely also lead to the mine developer being delisted.

Under the terms of the plan, the Kyrgyz Republic-focused group will reduce its existing liabilities by more than 50 percent, to less than $20 million, and receive a new working capital facility of up to $5 million.

As for the broader market, it was a fairly lackluster week for UK small caps, with the AIM All-Share moribund at 783.80 (down 2.31 points). Still, it performed better than the Footsie, which ended the week down 1.2 per cent.

Mineral resources of Alba (down 36 percent) was left counting the punitive costs of raising new funds in such a tough market.

The placement and subscription has been set at 0.035 pence per share, down from Wednesday’s closing price of 0.047 pence. The proceeds will be used to continue work at the Clogau-St David’s gold mine in Wales.

Now, a little more optimistic, and a first for AIM: a growth company with plans to return cash to investors. Yes, you read that right.

Smart ultrasound (up 48 per cent) is planning a “material return of capital” after agreeing to sell its clinical AI operations to healthcare giant GE for £40.5m.

As part of the transaction, IUG will retain its NeedleTrainer and NeedleTrainer Plus products.

It was also a big week for investors in Genedrive (up 53 percent) after it received Breakthrough Device designation from the U.S. Food and Drug Administration for its Genedrive MT-RNR1 identification kit.

This diagnostic is the first rapid point-of-care test to detect in infants a genetic variant that can cause lifelong hearing loss if certain antibiotics are given.

It’s down 45 percent so far this year, Versary This week, the fall was halted, although the reason for the resurgence was a bit long and convoluted. In short, the advanced materials group settled a loan with a subsidiary that now gives it 90% control of the business, called Gnanomat.

This allows Gnanomat to go out and potentially get grant funding from the Madrid region, where it is presumably based. The net effect? ​​A 40 percent increase in Versarien’s share price.

Actions in Hornby Airfix shares rose 30 percent after Oliver Raeburn, Airfix’s owner and chief executive of the model railway group, went public to buy almost 40,000 shares with his own cash. Such purchases by directors are often seen as positive signals from the broader market.

Finally, keep an eye out in the coming weeks for Georgina Energy, which is bucking the recent trend and joining the UK stock market. It will do so via a £5m reverse takeover deal involving a shell company called Mining, Minerals and Metals.

Georgina is part of a growing group of helium companies listed in the UK. The team, led by Anthony Hamilton, would no doubt be delighted to emulate the success of Helix Exploration, which has risen 260 per cent since its IPO in April.

Georgina has two potentially huge Australian assets, with prospects not only for helium but also for hydrogen and natural gas. It is expected to make its market debut on July 30 and be added to the standard LSE listing.

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