Why am I interested in AIM listings? An article in 'Telegraph' on Monday caught my eye. AIM is London's 'junior market' at The London Stock Exchange and for the first time in its history has had more companies delisting than floating; in the last 12 months there were 232 departures. 32 of these were required to leave as they lost and could not replace their NOMAD (nominated advisor). The view is that more Aim listed companies will go the same way. One commentator said:
" There are companies that listed on beliefs and their plans are no longer coming to fruition. The market is no longer willing to entertain these business models. It is a natural progression - we are going to get some shedding at the bottom end. AIM needs a culling."( Those at the bottom end are companies with a market cap (capitalisation) of £10million or less. CGP's market cap is listed at £8.82 million.)
The commentator continued:
"Typically management (of bottom end companies) will hold big stakes in businesses." (Mr Prosser and Mr Wills hold almost 66% of CGP's shares).
Another commentator made the point that he expects a number of businesses to run out of money over the course of the next 3 to 6 months. They will have to delist "if they cannot raise money and have no working capital, then their NOMAD will resign".
Whilst I am no expert in these areas it does seem to me that unless CGP can get on with Phase 1 in a hurry and get some 'readies' in from Chinamex et al and pretty damn quickly, the whole CGP plan to make a quick £40 million on this whizzo Gateway Scheme (financed by the Israel Discount Bank's loan of £28.5 million that has been heavily drawn down and needs re-paying in Nov 2009) looks like going 'tits up' .
One can live in hope, I suppose. If I was at Frank's 'gaff' in Pegwell Bay tomorrow morning for 'brekkers' I would want to ask 'Our Leader' and 'Woger' if they really believe that CGP/TDC can deliver the goods, particularly as Phases 2 and 3 will come in for a rough ride if they ever materialise.