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AIM-China Grand Group – a chance to bail

By Nigel Somerville, the Deputy Sheriff of AIM | Wednesday 13 September 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

AIM-China investment company Grand Group (GIPO) has divested itself of its investments and as such has until the end of this month to implement its investing policy or face a share suspension under AIM Rule 40. Another six months with no progress would result in a trip to the execution chamber.

On 13 July the company announced that:

The Board are also considering a secondary listing on an alternative market, as an alternative option to continue to provide shareholders a market for their shares during any prolonged period of suspension.

Now you may think that a company with £25 million locked away in China and facing suspension and possibly execution as a bit of a turn off. The good news is that the shares spiked yesterday – near enough doubling to 9.5p in the middle – with no news on offer.

It may not fully reflect the value of the cash, with the market capitalisation sitting at just £3.2 million, but some may consider that having lost its Chairman a few days later that this is as good an exit as is likely to be offered.

Bearing in mind that it only listed in January 2015 – at a whopping 80p – and the former chairman in its full year 2016 results (released on 27 June) referred to the clean slate of a balance sheet, £25 million in the bank, its listing restored and the improved position to make investments. But then he made an immediate exit just twenty days later. Not that much improved, then!

After all the China frauds which have gone before, I’m certainly not minded to chance my arm here. Sell.

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