RBG: Listed legal firm ‘temporarily suspended’ from trading
Shareholders were informed on Tuesday morning that troubled listed legal group RBG Holding requested a ‘temporarily’ suspension of trading, pending clarification of its financial position.
Earlier this month, the group was engaging in discussions with its lender, Rosenblatt Law, and other parties in relation to a sale.
The board anticipated that if a sale went ahead, the group would have ‘sufficient’ cash headroom for the foreseeable future, but that in the event that it could not reach an agreement, it would need to explore ‘alternative financing options immediately’.
Rosenblatt and Memery Crystal form the legal services division of RBG Holdings.
However, it was announced this morning that all discussions with the other party in relation to a transaction on a solvent basis have ceased.
As a result of its ‘financial position’ and ‘lack of progress regarding the various strategic options explored’, the board believed it is unlikely it will be able to secure the funding that it requires ‘in a timely manner’ to secure RBG’s future.
The board’s action to ‘protect value in the business for the company’s creditors and other stakeholders’ was to request a suspension of trading of its ordinary shares on AIM.
Over the last year, the value of RBG’s shares dropped by over 92 per cent, as the group traded at under 1p per share before the suspension.
This follows a tiff the board had with its founder earlier this month as it terminated Ian Rosenblatts’s consultancy agreement, along with a wave of allegations. Rosenblatt hit back at the board by calling them liars, but since then, both parties have since reached a truce.
Speaking to Morning Wire for Eyes on the Law, Dan Coatsworth, investment analyst at AJ Bell stated that “legal sector has been a big disappointment [on stock exchange]. Investors have lost money and they’re no longer interested.”