Microtec faces TSX suspension
June 3, 2004
ST-AUGUSTIN, Quebec - Microtec Enterprises is facing yet another financial hurdle.
The TSX Exchange, CanadaÃ¢â‚¬â„¢s senior market, has issued a notice to the Toronto-based security service provider that its shares will be suspended from trading on June 25.
The move to suspend Microtec stems from the companyÃ¢â‚¬â„¢s failure to meet the marketÃ¢â‚¬Ëœs $3 million total market capitalization limit. The TMC is a number, set as a listing requirement by the TSX, which represents the amount of outstanding market shares a company has on the market multiplied by the current share price.
Ã¢â‚¬Å“In order to remain on the exchange, a company has to meet the minimum limits of $3 million,Ã¢â‚¬Â said Sylvin Gauthier, information coordinator with the TSX Exchange,. Ã¢â‚¬Å“You canÃ¢â‚¬â„¢t go lower.Ã¢â‚¬Â
Microtec may continue trading until the suspension date, and if its TMC rises above $3 million, the company will be allowed to remain on the market. If the TMC does not rise, the business will be removed from the exchange.
Microtec stock was trading at 30 cents per share at press time.
Gauthier said there may be additional reasons why the TSX has taken this action, but he could not comment specifically on them. He said the TSX sets limits, such as the TMC, to protect the marketÃ¢â‚¬â„¢s visibility to investors and listed companies.
Ã¢â‚¬Å“We have to uphold a certain standard for investors to be attracted to invest in TSX listed companies,Ã¢â‚¬Â he said. Ã¢â‚¬Å“If we lower our standards, investors will not consider our exchange to be so attractive.Ã¢â‚¬Â
Microtec has taken a number of steps in recent months to improve its financial situation. In May, the firm was involved in negotiations to extend its bank credits and in April, Securex, a financial provider for the security industry, purchased a 19.9 percent stake in Microtec - a percentage that fell short of triggering takeover discussions.
For more on this story see the July issue of Security Systems News.