Wealth management company E&P Financial Group has formally requested to delist from the ASX.
The proposal is expected to be put forward for shareholder approval at an extraordinary general meeting on 24 October 2024 and requires 75 per cent of votes to be cast in favour of the delisting.
In an ASX statement, it said: “The EP1 board has concluded that the benefits of being listed on the ASX are materially outweighed by the potential benefits of delivering the next phase of growth in an unlisted environment.”
It particularly highlighted a “sustained negative impact on the EP1 share price as a result of regulatory proceedings and class action litigation. Notwithstanding the resolution of these issues, the lack of support for the equity market remains”.
It was announced last week that Dixon Advisory, which collapsed in 2022, will be subject to a public inquiry by the Senate economics references committee. The inquiry will probe “the reasons for the collapse of wealth management companies, and the implications for the establishment of the Compensation Scheme of Last Resort (CSLR) and challenges to its ongoing sustainability, with particular reference to Dixon Advisory and Superannuation Services Pty Limited (Dixon Advisory) as an example”.
However, E&P said it “has no further detail on the proposed inquiry and is unaware of the extent it may or may not be involved”.
Shares in EP1 are down by 19 per cent since the start of 2024 and by 51 per cent over five years.
There are numerous reasons that the company says it is seeking to delist:
- A sustained negative impact on the EP1 share price as a result of regulatory proceedings and class action litigation. Notwithstanding the resolution of these issues, the lack of support from the equity market remains.
- Poor trading liquidity in EP1 shares, making it challenging for new investors to join the register and for existing shareholders to realise value for their shares – having no prospects of index inclusion, nor any sell-side broker coverage.
- EP1 incurring an estimated $2.5 million in annual direct costs associated with being listed on ASX.
- EP1 having no near or medium-term requirement to raise capital (other than to fund the buy-back, defined below), and even if these circumstances were to change, raising capital from new shareholders would prove challenging at the current share price.
Should the resolution be approved, the final trading day for E&P shares is expected to be 9 December.
