One in 20 ex-AIM companies insolvent

One in 20 ex-AIM companies insolvent

Less insolvent AIM companies, according to Begbies Traynor

One in 20 AIM companies that have delisted are insolvent, according to
research by Begbies Traynor.

However, the latest findings are an improvement on last year’s survey, which
found that one in 16 companies were insolvent.

The reports suggests that business has been more successful in securing
funds.

‘While listing shares on a public market is an efficient way to raise money
and have a higher company profile, the downside is that companies are required
by regulators to report when they are missing profits targets or a board member
has resigned, which can cause serious instability with lenders and other
stakeholders and, in the worst scenarios, lead to the demise of the company,’
said Begbies south-east managing partner Mark Fry.

The research found that more than 60% of failures were from companies in the
engineering and manufacturing sectors, and most were triggered by them not
securing new funding.

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