Firm slams City as it plans to leave the London Stock Exchange
DG Innovate has announced plans to cancel its listing on the London Stock Exchange due to a lack of investor demand for early-stage companies.
DG Innovate is an R&D company specialising in sustainable transport and energy storage.
Although the firm said it has made “significant operational progress” over the past year, it has still struggled to raise sufficient funds to invest in its commercialisation strategy.
This lack of demand was partly due to the constraints of the prospectus rules but was also a result of a lack of interest from domestic institutional investors in early-stage firms.
“There has been and remains a broad lack of demand for exposure to companies at DGI’s current stage of development within the UK’s traditional institutional investor base,” the firm said.
DG Innovate said that there were “no obvious near-term catalysts” which would change this backdrop.
“The costs, regulatory requirements and additional administrative burden associated with maintaining the company’s listing are now…completely disproportionate to the benefits,” it added.
The delisting will reduce the firm’s cost base and help it raise capital, it said, noting that it was in talks with “potential investors” who could “substantially invest” if the firm cancelled its listing.
The delisting will become effective from 31 January.
Although a small firm, DG Innovate’s delisting caps off another poor year for the London Stock Exchange.
LSEG data shows 88 companies either delisted or transferred their primary listing away from London’s main market this year. The figures mark the most significant net outflow of firms from the market since the financial crisis in 2009.
The new government has pushed ahead with reforms to help revitalise London’s capital markets, including by consolidating pension funds to allow for greater investment into domestic companies.