10.12.2015

Essex Crane to delist

US based crane rental company Essex has decided to delist its shares, following a warning last August that it had breached the requirements of the Nasdaq stock exchange where it is currently listed.

At the same time as it delists the shares, the company will terminate the registration of its common Stock under the Securities Exchange Act. It will file the paperwork at the end of next week which will mean that the shares will cease to be traded by the end of the year.

Essex expects its shares will be quoted on the OTC Pink Sheets following delisting, but there is no assurance that they will be quoted on any Over The Counter market. By withdrawing its registration with the SEC the company will no longer be required to file public accounts each quarter, or annually. However, it say that it intends to continue to publicly disclose its results, through press releases, postings on its website and through the OTC Disclosure and News Service.

The Nasdaq warning concerned the fact that the Essex shares had failed to meet the minimum $1 per share bid price requirement for continued listing, it had until February 1, to meet the requirement before it would have been involuntarily delisted. With no sign of a significant change the company’s directors unanimously decided to voluntarily delist before the deadline.

Vertikal Comment

Essex has been struggling to return to profitability since a steep slide in revenues that occurred between 2008 and 2009. Its acquisition of Coast Crane in 2010 for $80 million only seemed to make matters worse and while the company has reported some quarters with positive revenue growth it has not made an annual pre-tax profit since 2007.

The business was acquired by Hyde Park Acquisition Corp Kirtland for $210 million in 2008 and then floated on the Nasdaq market. The company attempted to sell off part of the business earlier this year, but withdrew from the plan through lack of interest.

In the past year or so Essex has been cutting overhead costs that should have gone a long time ago, it is now very heavily indebted and has a long way to go to recover. A merger or sale might still be the best way out for the company and its shareholders?