North-east contractor's shareholders to vote next month on withdrawal from alternative investment market

North-east construction firm Tolent has announced its intention to stop trading on the alternative investment market, and will seeking shareholder approval for the decision next month.

In a statement released last Friday the company's board said that the costs of maintaining the listing were outweighing its benefits.

It said that providing trading updates under the AIM rules were proving “commercially disadvantageous” in the current economic climate and that it did not believe it would be able to raise capital through a share issue.

Peter Hems, the contractor's chair, also said being listed put his firm at a disadvantage compared to private companies. He said: “Private companies only have the requirement to produce accounts annually, which can help them to delay customers becoming aware of any deterioration in their performance. However, Tolent is more transparent owing to its relatively small size and requirement for regular trading update. In the current climate, when activity levels are low, it is not difficult for customers to identify the impact that their contract is having on the company's results and to use that to their commercial advantage.”

Under the AIM rules, the withdrawal must be approved by more than 75% of the shareholders. The vote will be held at a general meeting on 8 February 2010. Two major shareholders, Gutenga Holdings and Tarom Foundation, which have a combined holding of 73.4%, have already said they will vote in favour. Tolent is then expected to leave the AIM on February 15.

The company has been listed on AIM since its demerger from Amco Corporation - now called Billington Holdings - in 1999. The Gateshead-based firm had hoped to attract greater funding and improve its profile by the move.