Atlantic Coal (LON:ATC) shares were suspended today as directors backed a call for it to leave AIM.
The Pennsylvania-based anthracite miner is mulling the takeover of a nearby rival for eight times Atlantic’s current market value, a reverse takeover under AIM rules.
While the directors said the acquisition was a good fit for the comany, the expense and timeline of the reverse takeover process was not a cost effective way to pursue it.
Stuart Thomas, a shareholder with a 7.7% stake, has already called for a general meeting with de-listing from AIM one of the resolutions.
Thomas is a consultant who advises Atlantic on acquisitions.
In a statement on Monday the board said they support his motion, and also a change of name to Atlantic Carbon, and would vote their 13.16% stake in favour.
AIM cancellation will require 75% of the votes cast. If approved, the company would set up a matched bargain facility for shareholders to replace the listing.
Atlantic’s main asset is the Stockton mine, which is booming at present, but the board said its mine life is finite and more anthracite resources need to be acquired to maintain the current high production levels.
In a production update, Atlantic reported Stockton produced 185,298 tons of clean anthracite in the eleven months to November, a 28% increase on the same period in 2014.
Monthly raw run of mine production in November was a record 168,247 tons.
Sales over the period were 169,854 tons clean and raw (run of mine) sales 74,598 tons, representing a combined total of 244,452 tons, but the recent warm weather across north-eastern US may hit sales going forward it cautioned.
The assets Atlantic is looking to buy could match or exceed Stockton’s production, said the directors. They generated sales in 2014 of US$10.1mln with net income of approximately US$0.3mln (loss US$1.1mln) and net assets US$5.7mln.
Until the outcome of the general meeting, which is scheduled for 11 January, or unless the purchase is scrapped, the shares will remain suspended.