Minoan Group warns of likely trading suspension

(Sharecast News) - Minoan Group warned in an update on Friday that trading in its shares was likely to be suspended from 1 May due to its inability to finalise audited accounts for the year ended 31 October 2024, citing a lack of funds. The AIM-traded company also indicated that, without a resolution to its worsening financial position, an earlier suspension could be required to protect creditor and shareholder interests.

It said it was under increasing pressure after defaulting on a secured loan from Dagg LLP, which currently stood at about £1.19m, including accrued interest.

Default interest had been accruing at a 12% rate since January, on top of the 10% contractual rate, and Dagg had the right to demand immediate repayment.

In response to the default, Dagg submitted a proposal that could significantly alter the company's structure.

Under the terms of the non-binding proposal, Dagg or its nominee would inject roughly £4.44m into Minoan in exchange for new equity, convert the outstanding loan into equity, and write off about £1.1m owed by Minoan and its subsidiary Loyalward.

Additionally, the company would enter into a management agreement with Dagg-nominated personnel.

While the proposal could stabilise Minoan's financial position, the board noted it would result in substantial dilution for existing shareholders.

The deal remained subject to regulatory and shareholder approval, with negotiations ongoing.

If a formal agreement was reached that the board deemed viable, a general meeting would be convened.

If not, Dagg members - who also hold ordinary shares - had stated they would requisition a shareholder meeting to force a vote on the proposal.

Meanwhile, Nicholas Day, a Dagg member, had resigned as a director of Loyalward effective 25 March.

Minoan said it would continue to make announcements in line with its AIM obligations, but offered no assurance that a resolution would be reached.

At 1103 BST, shares in Minoan Group were down 69.23% at 0.1p.

Reporting by Josh White for Sharecast.com.