Troubled services company McDonnell Information Systems (MDIS) has suspended its shares from trading after failing to file its 1996 accounts by the 30 June deadline imposed by the UK Stock Exchange.
The company failed to file its results owing to delays to a planned refinancing package. The package was intended to bail out the beleaguered company in the wake of expected losses for its financial year ended 31 December 1996.
An MDIS representative said the company requested the suspension ?to avoid a volatile move in share prices? until the refinancing package is settled. He added that he expected to resume trading in shares in August, several weeks after its AGM, when shareholders were expected to authorise the refinancing package.
Colin Keogh, chairman of Close Brothers, MDIS? financial adviser, said the failure to file and the timing of the refinancing package were related, but he anticipated that the fund raising would be completed successfully.
A source claimed that the refinancing was to raise capital for another placing and the company is seeking to raise about #20 million.
Reports have suggested that MDIS is expecting to record losses of about #40 million. MDIS has conceded that ?very substantial losses? are anticipated, resulting from costs associated with contracts that overstretched it. ?The company lost its way by getting into areas that were not its core business such as banking,? said the MDIS representative.
The company?s share price has plummeted dramatically from its flotation price of 260p in 1995 to 23p at the time of the suspension.
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