The AWN Holdings Ltd (ASX: AWN) share price is starting the month in style on Wednesday.
At the time of writing, the investment company's shares are up 29% to 80 cents.
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Why is the AWN share price rocketing higher?
This morning AWN released a market update which included its unaudited results for FY 2021 and plans for the future.
According to the release, the company's revenue fell 5% to $110.5 million in FY 2021. This was due to COVID-19 lockdowns impacting its Aevitas business unit.
Despite this, the company was able to record a statutory profit after tax of $50.1 million for the year. This compares to a loss of $13.1 million a year earlier. Management advised that this reflects a non-recurring gain on the deconsolidation of the VivoPower business and an improved performance from EdventureCo.
What else was announced?
This morning AWN revealed that it has formally applied to the Australian share market for the removal of its listing. This is pursuant to ASX Listing Rule 17.11 and subject to receipt of shareholder approval.
The release also explains that to provide shareholders with liquidity to dispose of their shares prior to a potential delisting, the Directors intend to activate AWN's on-market share buy-back scheme.
The buy-back will be conducted within the '10/12' limit, such that 10% of total fully paid ordinary shares on issue can be bought back within a 12 month period without the requirement for shareholder approval.
In addition to this, in order to provide additional liquidity, the Directors revealed that they may also consider establishing a share sale facility to augment the on-market buy-back. Though, the implementation of any share sale facility would be conditional upon ASIC approval.
Why delist?
The Directors have unanimously determined the proposed delisting is in the best interests of all shareholders. One of the reasons for this is that AWN has consistently traded at a material discount to its net asset backing.
As a result, it believes that if AWN's shares were unlisted, existing investors seeking to exit will ultimately have a greater prospect of realising value closer to net assets.
