Azonto tanks after revealing AIM delisting plans

Shares in Azonto Petroleum halved on Wednesday morning after the AIM- and ASZ-listed company said it had agreed to sell its main investment for more than the company's current market value but planned to delist from the UK junior market.

The Sydney headquartered outfit, which will remain listed in Australia, said it had entered into a conditional sale and purchase agreement to dispose of its entire 35% stake in Vioco Petroleum and certain wellhead drilling equipment in Côte d'Ivoire to Vitol E&P Ltd, the owner of the remaining 65%.

Vioco is an 87% owner and operator of the CI-202 Block in Côte d'Ivoire, within which the Gazelle project is located.

As Azonto's interest in the block constitutes its main business, under Australian and AIM rules the disposal is conditional on a shareholder vote. The company said it will provide details on an extraordinary general meeting to approve the disposal "shortly".

Azonto's directors said the board was unanimous in their agreement that the disposal was in the best interest of all of its shareholders.

"It is intended to enable the company to realise value for its interest in Block CI-202 in excess of its market capitalisation and removes significant financial obligations for which Azonto would be committed in the next 18 months. The board believes that the disposal will allow shareholders to retain value in the company which, post completion will be considering new investment opportunities."

On the cancellation of the AIM listing, the directors said they had made the decision due to a desire to reduce ongoing costs to preserve cash whilst it pursues new opportunities, and because shareholders will retain the ability to trade their shares on the ASX.