Shares more than double as cash shell replaces directors and reduces liabilities
London-based cash shell, Itsarm, experienced a surge in share prices on Monday following its announcement that it has agreed to several conditions as an alternative to compulsory liquidation. The deal, which includes the replacement of its current directors, was proposed in response to a winding-up petition earlier this month.
At 0756 GMT, Itsarm’s shares were up by an impressive 175% at 0.55 pence, reflecting investor optimism.
Originally a womenswear fashion brand, Itsarm has made considerable efforts to secure its future. The company has entered into binding agreements to replace its board, conditional on the withdrawal or dismissal of the winding-up petition set to be heard on Wednesday. The new directors, David Craven and Jean-Paul Rohan, will assume their roles once the withdrawal is confirmed, while current Nonexecutive Chairman James Sharp and Executive Director Richard Monaghan will step down.
This move not only demonstrates Itsarm’s commitment to recovery but also significantly reduces its liabilities and contingent liabilities to approximately £140,000 ($179,970). The company aims to settle this amount as promptly as possible.
Provided that the withdrawal is successful, the proposed directors have plans to acquire another company via a reverse takeover in the near future. They are currently evaluating several opportunities that align with their objectives.
Itsarm acknowledged the potential risk to creditors if immediate action had not been taken. On June 5th, the company expressed concern about its contingent and prospective liabilities. It confirmed plans to petition the high court for the formal insolvency of the company in order to protect creditors.