Argentex shares crash as firm fights to survive
Argentex shares plummeted nearly 90 per cent in early Tuesday deals as the firm resumed trading on London’s AIM.
The embattled currency firm suspended its shares from trading on April 22 after it said its liquidity had significantly worsened as the US dollar weakened.
The company then agreed to a takeover from rival IFX on April 25, just hours after it was announced the firm’s chief executive would exit the company.
IFX will pay 2.49p per share in the takeover deal, which valued Argentex at nearly £3m.
Despite falling more than 90 per cent, the company’s shares were still trading at nearly double the offer price of 5p.
On Tuesday, the group said it had received a £20m revolving credit facility from IFX Payments to help keep the lights on while the takeover is agreed.
Argentex said on Tuesday the revolving credit facility (RCF) would allow the business to draw down funds to meet margin calls from its liquidity providers in the event of “further adverse foreign exchange movements.”
The RCF has initially been provided for six months, but can be extended at IFX’s discretion for up to 12 months from the date of agreement. It has an interest rate of 15 per cent annually and a non-utilisation fee of 7.5 per cent.
Argentex faced a crisis amid dollar turmoil
Argentex battled a liquidity crisis in the wake of President Donald Trump’s tariff onslaught as the dollar hit a three-year low – with sterling at $1.34 and the euro at $1.15.
Trump’s attacks against the Federal Reserve did little to calm investor nerves after Trump called for the termination of the Fed’s chair, Jerome Powell.
But, the President has since retreated to a softer tone, telling reporters: “I would like to see [Powell] be a little more active in terms of his idea to lower interest rates…but, no, I have no intention to fire him.”
Argentex said it had “been exposed to significant volatility in foreign exchange rates, particularly in relation to the rapid devaluing of the US Dollar against other major benchmark currencies which has been precipitated by the various recent announcements from President Trump regarding tariff policies and US government spending cuts.”
Ahead of the takeover from IFX, Argentex said its board had dismissed an offer from Lumon Acquisitions as well as fintech developer Terry Clune and Argentex’s former chief executive Harry Adams.