Sorted Group Holdings PLC (AIM:SORT) saw its share price halve to 10p after it unveiled plans to dispose of its main operating business for £1 and become an AIM cash shell, just two years after its arrival via reverse takeover.
The AIM-listed software group said it intends to sell Sorted Group Ltd for a nominal consideration, subject to shareholder approval later this month.
On completion, the company will no longer own its trading operations and will be reclassified under AIM Rule 15 as a cash shell, meaning it must complete an acquisition within six months or face suspension.
The disposal follows a period of restructuring after the company acquired the Sorted business in February 2024. Since then, headcount has been cut from 90 to 37 and costs reduced, including closing its London office.
Despite these measures, the board said the business continues to require significant cash to scale and reach profitability.
As part of the transaction, which is expected to be completed by the end of June, around £3.5 million of debt owed by the subsidiary will be released, alongside other intra-group liabilities.
Following the disposal to 'Brislington Holdco', which has a registered address in Bristol, the listed entity plans to change its name to SGH plc and pursue acquisitions across a broad range of sectors, with no current operating income and expected monthly costs of about £18,000.
The Sorted that arrived on AIM in 2024 was based in Manchester with an office in London and a business model that it claimed offered "scalable predictable revenue" from customer subscriptions to delivery platform, where customers ranged from SMEs to corporate clients including Marks & Spencer, ASOS and Asda, along with re-seller agreements with postal carriers such as UPS, Royal Mail, DPD, FedEx, Yodel and Evri.