RegTech to exit London market over financial struggles

RegTech Open Project PLC, a London-based provider of regulatory compliance systems, has announced on Monday (Dec 2) its intention to delist from the London Stock Exchange’s Main Market, citing ongoing financial difficulties.

The decision follows a series of challenges, including the suspension of its shares in June after delays in receiving a £1.2 million loan from RegTech Italy, a company owned by Alessandro Zamboni. In a statement, RegTech confirmed it had evaluated the pros and cons of maintaining its listing before formally requesting cancellation. As an equity shares-listed entity, the delisting does not require shareholder approval.

The company has outlined a transitional strategy to manage the delisting process. This includes raising additional capital, identifying a new chief executive officer, and exploring exit opportunities for shareholders wishing to divest. While specific details remain undisclosed, RegTech noted it has secured an extension for filing its year-end accounts.

In explaining the rationale behind the move, RegTech described the delisting as “part of a short-term cost reduction and liability management plan.” The decision reflects the firm’s financial position, challenges with a shareholder loan agreement, and broader difficulties navigating growth within the listed issuer environment.

Other contributing factors include the resignation of the company’s executive team in London and challenging market conditions. RegTech’s growth strategy, it noted, has been hindered by its status as a listed entity.

The decision will also bring an end to RegTech’s relationship agreement with The AvantGarde Group S.p.A. and RegTech Italy. Signed in August 2023, the agreement had stipulated that TAG and RegTech Italy would ensure RegTech’s operations remained independent of their associated entities.

The delisting is set to take effect on or around 31 December, with the final trading day expected to be 30 December. RegTech shares last traded at 4.50 pence in London.

This development underscores the challenges faced by smaller listed firms in navigating volatile markets and securing funding. As RegTech charts a new course, its focus on cost management and operational restructuring may signal broader trends for similarly positioned firms in the sector.

Conversion based on an approximate exchange rate of $1 = £0.80.

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